We Lost a Client …

The Heading of this Blog is hurtful, isn’t it? No one enjoys a loss, especially when you are in business and having clients is the driving force behind success.

We have heard and know that the role of entrepreneurship is to provide valuable solutions to individuals or organisations. This is same with me when I started my practice. I have only worked for big companies’ i.e. Recognised retailers and saw fit to use my knowledge, experience and education to serve the SME’s so they can build their businesses with direction. I don’t believe anyone can start a business that they don’t want to be successful.


Among our business clients are also professionals such as lawyers, doctors, etc. some of which have full-time jobs and locums, which is where we as the accounting firm come in. We always advise them to allocate their locum income to business as it similar to a part time job, the exercise will also help to lower their Personal Income Tax and further motivate them to start and build their own practice(s).  They love this concept!!


Earlier this year we signed a new client who is an Audiologist, just relocated to here in Johannesburg. (She was originally based in Durban) She was referred to us by another client of ours who is a Speech Therapist because she is “happy with us”.


As usual after her first call we arranged a meeting to understand her work and to iron out the details of our working relationship/contract.

The new client has just started her practice working full time for only a few months now. She is always on the road attending meetings, seeing clients, etc.


As she did not have an accountant or a bookkeeper we had to back date her books which includes closing off the previous tax season (12 months’ work), update & begin with the new one.

The first months’ work and reports clearly show the actual sales, expenses, costs of consumables and the practice assets. Immediately after submitting for this first month the client requested a meeting to clarify some pointers and transactions. We arranged a meeting and added on some advice, little did we know – this was opening our client‘s eyes to our loss.


In the fifth month, when we request the monthly paperwork she decided to give me a call. The call was to let me know she would be stopping work at the practice and going back to the field – working full-time for the government because the practice thing was not working. This was sad for both of us. For me I thought: “We helped you see the light and now you just drop us like that?” (Inside voices) but I realised I must also be reasonable and put myself in her shoes, and further remind myself that the reason I started my practice was to solve people’s problems – so this was one of them!


The client said, “I know it is sad for you Dikeledi, you’ve been so good to me and my practice but I am not making money out of this and the practice consumes so much of my time with no satisfactory returns because I end up relying on my husband for fuel and stuff, I mean you have seen that”. And truly I had, under normal circumstances I would advise the client to start working harder on getting new clients but she had already made up her mind and was ready to start her full-time work in a month’s time.

She further said “I would still like you to do my personal filing” (this means once a year) “Plus I have a new client for you in Pretoria she is a GP – here are her details. I have already spoken to her about you ” (then there was the positive) I will refer them to you don’t worry.


My message about all this is – In your pursuit of purpose you are going to see that by providing solutions to people you will, at the same time, be the reason for them to leave to their benefit but because you have done your work so well and you were honest they will feel they are indebted to you and do some marketing on your behalf.


Whatever you do, serve…


A Special Quote from me:  “Without bookkeeping, it’s impossible to measure the true success or failure of your business dealings. You won’t know that your R – per month magazine ad campaign isn’t worth the investment. You’ll have no idea why you barely have enough money to operate your business and you won’t know where the money went. A smart business owner realizes bookkeeping has several undeniable benefits”.


Compiled by Dikeledi Seoloane – On behalf of Matsobanemetja Business Consulting Pty Ltd. (Coaching Division)


www.matsobanemetja.co.za

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What it means to File Annual Returns and Receive Refunds

What It Means To File Annual Tax Returns and Receive Refunds.

I have dealt with numerous cases where individuals are facing problems such as owing SARS money and being unable to receive their last pay-out after their resignation/retrenchment. This has included elderly people that are already on pension.

My wish is for my fellow citizens to understand the role taxes (SARS) play because many have fed themselves with your funds while you also receive partially while still employed.

When one receives a refund it is important to ask “How am I receiving a refund?” There is always a reason. Please understand this: the function of SARS is more to collect monies from the taxpayers (citizens) and less to pay money out. There are many organisations that give out money, but make no mistake, SARS is not one of them.

What is filing annual returns?

You or your company on your behalf pay taxes every month – PAYE (pay as you earn) and this is deducted on a monthly basis to SARS as reflected on your payslip. This means you are already paying tax.

Question: Why must you still submit when you are already paying and there is proof?

Every tax season you are required to gather your IRP5 and a summary of all deductions such as medical aid (you must provide a medical tax certificate), log books for those who have car allowances, retirement annuity deductions, etc.

An IRP5 in simple terms is a summary of all the deductions made by your employer over the last 12 months. It is always a must that you have it. After obtaining all of the documentation we file; either via eFiling or directly at a SARS branch. The filing process consists of the comparison of the deductions as presented on the IRP5 and what SARS has received from you previously (from your employer) if all the figures agree there is no refund for you and you don’t owe the taxman.

How does one get a refund? If after filing what you have on your IRP5 is not equal to the data SARS has on their system it means that your company was over-deducting from you and that money is paid back to you by SARS – we call it a REFUND.

There are instances however where you may owe SARS – this will be because your company was under-deducting your taxes and as a result you must pay back the money after all the reconciliations have been made. This is a result of your companies’ short payment.

My focus with this blog is on those that have been receiving pay-outs from SARS. I have found out that one will use a consultant with the promise of a refund without understanding what it is or how it happens. This is what happens: Consultants will take out information – a summary of deductions from the IRP5 (when they file) and this will guarantee that you receive money back because your documents will reflect as if your company has been over deducting. This is illegal and fraudulent. What you have received as a refund is an illegal refund.

The consequences: you are bound to receive incentives as a lump sum from SARS upon your resignation, retrenchment or pension. Therefore if you have been getting illegal refunds while still employed you are absolutely digging a hole for yourself.

You are lucky if SARS notifies you while you are still employed and you are able to fix it because many others only realise when they submit their final returns and it becomes very confusing and painful – but I did say SARS would never give you money that does not belong to you. At times they do not notify you, they just have a garnishee order put against you via your employer.

SARS is not your investment/savings institute where you put money in only to receive it back later. Please always ask questions as to how anyone receives money from SARS, especially when they are using your profile.

Compiled by Dikeledi Seoloane, on behalf of Matsobanemetja Business Consulting (Pty) Ltd

www.matsobanmetja.co.za

info@matsobanemetja.co.za

WHY CORPORATE SOCIAL RESPONSIBILITY (CSR) PROJECTS ARE A MUST FOR SMEs TOO

Having CSR Projects is compulsory for every business irrespective of the company size or age this is my view. I will mention at least 3 reasons in hope to encourage all SMEs to join force. Through my business engagements many think this practice is only good for Big companies and they therefore dismiss the idea or not pay attention to it and I think this is a mistake. It must be the mentality of running small businesses that led to this conclusion 😉

Big companies are taking advantage of the use of CSR projects and link them to their core businesses. Companies such as Pick n Pay, Liberty, etc have their own registered Foundations and you know why? From an Accountant point of view I know the CSR Projects help reduce their Income Tax bracket (this is legal by the way) but this is not the only reason they are involved. CSR is an important building block.

Here are my 3 reasons why your ‘Small Business’ will benefit from CSR Projects.

1. CSR are a good use as a Marketing Tool (though they deny this fact)

  • The main purpose for CSR is to uplift and empower communities but while at it you are able to put your Company name out there. Society will be able to identify you and your brand and what you stand for, that is called – BETTER BRAND RECOGNITION.

2. Positive Business Reputation

Building a reputation as a responsible business can lead to Competitive Advantage. Once people recognise you for the work that you do for the communities they don’t just want to buy from you – they insist on it. This will help with Sustainability.

3. Better Financial Performance

The more people know about your business the more they come to you and you will receive referrals too. This will no doubt increase your profit margin which lead to a Business Growth.

As much as Government has guidelines policies and form partnerships with some of these big companies / corporates but my thorough analysis is the big winner in all this is still the companies, they are reaping more rewards because this method works. For example look at how they all jumped to the Learnerships & Internship Programmes which that too is supported by the Government. Your argument will be you lack resources but you can contribute your TIME for starters.

My advice though: If you are going to do it please do it wisely. Make sure that the community will not ONLY recognise you for your social projects but must be able to identify your main business too that is very important, Link the two wisely.

Compiled by Dikeledi Seoloane on behalf of Matsobanemetja Business Consulting (Pty) Ltd – Coaching Division.


www.matsobanemetja.co.za

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COMPLIANCE – VAT MATTERS

Question: A potential client and business owner, referred to me by a good friend, has been registered for VAT since 2008 and yet has never submitted his Company VAT schedules. Now he wants a Tax Clearance Certificate from SARS and he cannot get it as he just found out that he owes SARS 45K. Dee, can you help?

Answer: Of course I can but the client needs to understand that this is a case on its own. It cannot be solved as easily and swiftly as the client wishes.
Business Owners: Compliance is very important; unfortunately it is not a choice but a must. When you run a business, you need to adhere to the rules and regulations that have been put in place.

When you are a VAT registered vendor, you act as an agent on behalf of SARS. The 14% that you add on your goods sales is not yours, but SARS, we need to be clear of this from the beginning. Every two months you are expected to submit your VAT schedule to SARS, failure to do so it will mean that you are Non-Compliant. Your VAT submission to SARS is calculated against what you’ve charged your customers/clients and what your suppliers have charged you. You will, then not be paying out the total amount you’ve charged, but the difference of the VAT INPUT and VAT OUTPUT (in line with the 14% in SA).

By interacting with clients, or even during my Bookkeeping workshops, I’ve realised how few people actually understand the VAT effect or implications in business, or even Compliance for that matter. Some clients’ think that VAT increases their profit – they are completely incorrect, the 14% VAT amount you charge on your invoices IS NOT YOURS. See a brief how VAT works.

When we calculate VAT, we consider the two types of VAT which are VAT INPUT and OUTPUT. VAT INPUT means when a company buys goods or services from another supplier, VAT is charged on the purchase price.This account will usually show a debit until the output VAT comes into account.
VAT OUTPUT – means when the company sells its own goods or services to its customers and charges VAT. Therefore, in the VAT settlement, you deduct VAT input from output; the resulting amount must be reported to your regional tax office. As you can see, you only pay tax to the state on the value your enterprise has added to the goods. If your purchases exceed your sales in any one period, the difference naturally is refunded. There are instances where SARS may owe you or vice versa!

After what I have mentioned above you also cannot cheat SARS and claim that you have not traded, because your business transactions will be reflected on the suppliers that are compliant and they will show that they had been charged VAT by you on certain invoices, that’s how they will see that your information does not correspond to that of your business counterparts. SARS will then be able to calculate how much you owe them and can also raise an audit on you.

So with regard to the client here, it means that we must back date VAT schedules from 2008 to current and prove to SARS that the client actually owes a certain amount and not the 45K being claimed, if that is the case. SARS will still, however, open their own audit to see if you are not defrauding them, seeing that they already had expected that amount of money from you. They won’t let it go that easily.

It is very important to comply. In the midst of all this, jobs are passing by because you are unable to get a Tax Clearance Certificate; you have, in fact, disadvantaged yourself.

Compiled by Dikeledi Seoloane on behalf of Matsobanemetja Business Consulting (Pty) Ltd – Coaching Division

info@matsobanemetja.co.za
http://www.matsobanemetja.co.za
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​A QUESTION WAS POSTED TO ME – PAYROLL

Q: I run a small business and have about five employees working for me, i always struggle with the issue of submission especially on the Payroll side.

A: You will always struggle with your Payroll Compliances for as long as proper bookkeeping is not in place.
Especially if deductions has to be made from your staff salaries, deductions  such as PAYE and other tax issues on a monthly basis.  Such deductions can be those of Deparment of Labour, Medical aid, SARS, Employee allowances, etc.

All this need to be done accordingly and accurately. If you always delay the immediate payments to this departments you are adding to yourself a painful hassles as when the Tax season opens this contributions must be up to date and if not it means that you will need to backdate the monies owed.
Let me just explain the three mentioned above.
1. PAYE

 A pay-as-you-earn tax (PAYE) is a withholding tax on income payments to employees. Amounts withheld are treated as advance payments of income tax due. They are refundable to the extent they exceed tax as determined on tax returns. Therefore as the employer you are responsible to register your employees for Tax Returns and the deductions to be made. If for instance you delay the deductions, it will be your fault when the Tax season opens and you have not paid the funds to the Receiver of Revenue then your company will be held reliable and could be concluded as fraud as it is illegal to use the employees PAYE contributions for your company use or witholding it. The money belongs to SARS.

2. The Department of Labour Contributions

Contributions such as Provident and Pension Fund. The main aim of a pension or provident fund is to provide benefits for its members when they retire from employment. The fund also usually pays benefits when a member dies while still working, or is unable to work because of illness, or is retrenched. Once you have registered your employees for Provident or Pension Fund you must make sure on a monthly basis this funds are deducted and allocated accordingly from their salaries to the relevant Governmental Institutions.

3. Medical Expenses

If your company has the medical aid scheme that works with and you offer it to your employees, then this mean you as the employer need to deduct straight from their salaries and pay out to the schemes as their contributions. It is your Company ‘s responsibilities and obliged especially if you have made this compulsory for your employee (s).

If you do not have a good proper bookkeeping system in place you will have te figures messed out and will therefore be difficult to work out your employees contributions,p as all this contributions should show on their payslips.

As much as your employees are not submitting their payslips on a monthly basis to SARS but the deduction summary will reflect on the IRFP5. Therefore that will be the time to reconcile what your Company has been deducting against the employee as equal to what the Company has been paying to this Institutions.

Of course the deductions varies from company to company because it depends on what your Company offers to the employee. Compliance plays an important role in your company and need to be adhered to.
Compiled by Dikeledi Seoloane on behalf of Matsobanemetja Business Consulting (Pty) Ltd – Coaching Division
http://www.matsobanemetja.co.za
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A QUESTION WAS POSTED TO ME – Goods Supply. 

A QUESTION WAS POSED TO ME – Goods Supply.


The question is from a client who sells African costumes and accessories, and now has the opportunity to sell in bulk to shops.


Q: Hi Dee. Is it a good idea to supply the same things to different shops?

Do I need to disclose to the other that I’m supplying another shop with same things? What if they are at the same mall and selling the things at different prices?


A: A definite YES. I have never heard that Tiger Brands cannot supply goods for both – Pick ‘n Pay and Checkers if they are operating in the same shopping center. Anyone who wants more customers visiting their stores must make use of their marketing strategies to attract more customers. Your job is to sell your product and convince them to buy more.


When you started your business, you did not plan to sell to specific people ONLY, but the masses who are interested in your product(s). Surely, your goal was to sell your items directly to the public instead of bulk supplying to shops, however as business grows things change and you as a business owner, need to adapt. Stores are showing enough interest in your products that they want to buy in bulk and sell in their stores, and this affords you a great opportunity to grow. You need to grab this opportunity with both hands and never look back.


It is your product that you are selling, therefore no one should dictate where and how to sell it. The issue of your customers competing with one another has nothing to do with you and you have nothing to disclose, really. If you do disclose anything, let it be to convince and motivate the other to buy and display your products in their stores. It is up to them how they choose to market and beat each other with sales. You continue selling to anyone in need of your product. You deal with your own competition. If all the stores in a shopping mall need your product, let it be, supply as much as you want. All retailers stock products of Unilever, Procter and Gamble, Tiger Brands etc. Ask yourself why?


Don’t limit yourself, create a supply Chain instead. Supply Chain simply means – every company that comes into contact with a particular product, for example, the supply chain for most products will encompass all the companies manufacturing parts for the product, assembling it, delivering it and selling it.

That’s when you have to expand and learn more about the Business and growing of it, you might want to learn the stages of Supply Chain. Read below.


Plan

The entire process of supply chain management must be planned out with the primary goal of the organization in mind. The plan should also address how the organization’s goods or services will fulfil the needs of their customers.


Develop

A major component of this process is to develop strong relationships with suppliers. The potential suppliers are then contracted and conditions of delivery, payment and transportation are then finalized with them.


Make

The product is finally manufactured, thoroughly tested and packaged and then launched into the market.


Deliver

Involves the transportation of the product through various channels ultimately into the hands of the customer.


Return

Customer queries and complaints are handled subsequently. If there are any defective items present, they are returned to sender.


Compiled by Dikeledi Seoloane – On behalf of Matsobanemetja Business Consulting (Pty) Ltd., Coaching Division.


www.matsobanemetja.co.za

info@matsobanemetja.co.za

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BUSINESS ETIQUETTE

Even in business one need to follow or adjust to certain rules or manner of doing things, because this guidelines may assist in opening opportunities for us. Those that we do business with will be patient with us, be willing to listen to what we are to propose or say because we would have presented ourselves accordingly. Therefore we need to be careful not to compromise such etiquette in business.

1.Communication

Communication plays an important role in our lives, in business too. How you approach and communicate with your business associates is crucial, to a fact that people may lose interest of doing business with you due to your lack of proper communication. We must still continue with our formal traditional way of communicating regardless of the type of medium we are using. When you write your  email it must consist of the Headings (Greetings), Body (Content) and Closing. Do not assume that because you are using the informal type of medium the format does not apply. For example you would like to send me a formal proposal via email but only to find out you do not have my email address, you then decide to send an inbox message on facebook, you will still simply write “Good day Dikeledi, Can i please have your email address, thanks” . There is no way this message will not grab my attention and i will therefore forward to you my email adress without thinking twice and i will still be looking forward to your email. But could you just have inboxed me “send me your email address” without greetings, though i personally will give to you but it would have raised some concern, even more especially if we have never spoken before. Often the use of simple words such as “Please” and  ‘Thank you” when necessary is important.


2.   Be presentable

Reputation is everything in Business. You must learn to be presentable at all times. It is true when it is said you are the face of your company as the owner. Before you even introduce yourself or sell your business you would have been assessed or analysed by how you carry yourself .

Being presentable should not be interpreted otherwise, it simply means being clean and well dressed.  


3. Be on Time

When you have a meeting set at a certain date and time make sure you make it on time, this shows you are serious, professional and not taking the other party for granted. It is also considered to be rude to be late but it would seem more disrespectful if you have not communicated your delays. When you see that you are late please do warn the other party/s, that will show a sign that at least you are considerate.


4. Know when to sell

It is an obvious case that we want people to know about us and our businesses but the truth is we need to have good timing for this. Engage with people first, start with a favourable topic and when all parties are warming up into the conversation it is then that you may find a way to issue your business card or marketing material. You also don’t want people to be worried when meeting you as they know that the networking will only be about you, you and you.

I hope you will find this helpful, i had to learn such in my two and half years in business.


Compiled by Dikeledi Seoloane on behalf of Matsobanemetja Business Consulting (Pty) Ltd – Coaching Division


info@matsobanemetja.co.za

www.matsobanemetja.co.za

Business Practicalities No.4 – The Art of Surviving Failure

The one thing that makes life so interesting and joyful is failure. Honestly this life thing was not going to be fun if in all that we do goes smoothly all the time. As challenging as it is, humankind must learn how to deal with failure. Failure is not as bad as we perceive it to be, i personally think that the more we fear failure or hate it ,it is the more we allow it to defeat us. One way or the other we need failure at some point for us to succeed. We were not going to know the joy of succeeding if we never have experienced failure in our lives.

There are many failures in Business. I remember when i was preparing my last Business event for the year under our Women Empowerment Project, i have encountered so many failures, there was even a point where i was thinking of cancelling the whole event. Today if you ask me about the outcome of the event i will tell you how beautiful the event was. I carry so much pride, but mostly not because the event was beautiful but because i was not defeated by the failures i had encountered. It is always fulfilling to finish what you have started. Most of the time we don’t really realise that our past successes, big or small aid as a motivation for our future.

The following techniques helps me in dealing with failure and overcoming it.

1. Acknowledge Failure

In most cases, and in life in general when we shy away from our circumstances or background we are more unlikely to change the status quo. When failure hits you, acknowledge it and find the way forward. And by so saying we should acknowledge failure i am not saying we should accept things as they are and leave them but i am merely saying that let’s recognise it and let’s find other possible ways to deal with them.

2. Don’t dwell so much on Failure

For sure failure does force one to pause or stop but do not pause forever. Use the time to pause to think of the next move. Once you stop for long, i truly believe it is the more you are allowing the attack. When failure attack you, you need to fight back, think of the new plan or strategy, change positions if you have to but just don’t give up.

3. Think of when you succeeded

I often make use of my past successes as my source of encouragement and motivation. Always refer back to what you have done before and succeeded in it and just gain the confidence that you started whatever what it was and you came out the winner, it really helps. Your past successes helps with your mental and emotional strength.

4. You are not the only one

When you are faced with a challenge you are more likely to feel that you are the only one facing it but you are actually not. You are not the first and you will never be the last. Those who came before you they face the same challenge and they have passed through it because they had chosen not to quit, and therefore you need not to lie to yourself and think you are the first. You just don’t quit, do not  give failure the satisfaction that you are the looser.

And i also find what works for me more is that i have more positive thoughts than negatives. I will always try to find the positive in everything and that gives me the strength and courage.

Compiled by Miss Dee, On behalf of Matsobanemetja Business Consulting (Pty) Ltd – Coaching division.

For any queries www.matsobanemetja.co.za

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BUSINESS PRACTICALITIES No.3 – Organizational Culture

A business is brought to life by an individual/s. As you are starting the company you must fulfill the roles and perform the duties of all the various positions in your company departments.

You become the CEO, Marketing Manager, Public Relations Manager, etc all at same time. This is because due to lack of funds you might not afford to pay salaries yet however as the business grows you gonna need some extra hands to assist in building the company further.

The question that mostly arise from entrepreneurs is that it becomes difficult to work with other people or the handing over of work. And understandably so, i mean you are so used to be hands on in every aspect of your business from pushing sales, invoicing clients, briefing clients, etc and all of a sudden you need to delegate, divide the work and trust the next person to deliver as you would. It is not an easy assignment to carry out but it needs to be done for the growth of the business. In response to this frustrations the one factor i advise them to look into is the Organizational Culture.

   

What is Organizational culture?


Organizational culture is an idea in the field of Organizational studies and management which describes the psychology, attitudes, experiences, beliefs and values (personal and cultural values) of an organization. It has been defined as “the specific collection of values and norms that are shared by people and groups in an organization and that control the way they interact with each other and with stakeholders outside the organization.”

Employees are not the only people you will interact with. Before you have to deal with them you would have dealt with Customers, Suppliers, other Business Owners,etc. All this individuals are very special in your business and you interact with them on different aspects and levels of your business. By the time you acquire assistance and employ extra people you would have mastered the act of dealing with any of them and those methods you will then pass to your employees – this to me i define as Organizational culture. You will develop this cultures because of the experience you had with them, and as having to have worked with them first hand. Therefore to me as the Business Owner you should be the founder of a series of this values and beliefs through your experience.

This definition continues to explain organizational values also known as “beliefs and ideas about what kinds of goals members of an organization should pursue and ideas about the appropriate kinds or standards of behavior organizational members should use to achieve these goals. From organizational values develop organizational norms, guidelines or expectations that prescribe appropriate kinds of behavior by employees in particular situations and control the behavior of organizational members towards one another.”

For example, you gonna need to pass step by step the rules or a manner of the project execution. For our employees to follow through this organizational Cultures, they will need a very extensive training whether you have hired them on the basis of experience or not so they can adapt to your own set of culture accordingly. See this as an investment. It might take away a lot of time from you and you will seem to follow behind with your schedule but believe me once the one employee master it then they will be able to pass to the next employee.

Two things that need to be done by us Business Owners. It is to be Transparent and to practice Consistency at all times.

Transparency – Your true character as an individual must be known by the people you work with. This makes it easy for them to understand you better, and that will be easy for them to follow through with your organizational culture. For an example: I am known by my business associates and employees as having a “serious personality” or as “a perfectionist”. As much as i tried to deny or find myself explaining this sort of “my personal traits” i just can’t hide them, they define who i am, they automatically happens and therefore this traits have assisted a lot in them understanding me and my work.

Consistency –  When you  have developed those set of rules to practice in your business you must stick to them always. Do not allow favours to family members and friends at the expense of the business. Because once you allow that to happen it is going to be tricky to try control their misbehaves. It is no secret that families and friends like to take advantage, not realising that with business things are different. If you have failed being consistent in your business how do you expect the people coming in to? Set a good example and Practice what you preach.       

Compiled by Miss Dee – On behalf of Matsobanemetja Business Consulting (Pty) Ltd, Coaching Division.

For any queries please get in contact with us here www.matsobanemetja.co.za

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BUSINESS PRACTICALITIES No. 2 – Basic Compliance

What do we do after registering our Companies?

A business starts with an idea. Then you gather equipments and resources such as Capital or Material needed to start trading , but before trading , we are required to register this business idea. We register with CIPC ( Companies and Intellectual Property
Commission ) formerly known as CIPRO.


Why do we register a business idea?
In simple form,we operate this businesses in a country that has Business Laws under the Companies Act of the country. Once a business is registered , it means it has all the legal
entities allocated to it for recognition, identity , development and for protection. Think of it like this: When a child is born, they need an identity in the form of names, parents, ID numbers ,etc. The same applies with companies.


So now that the business is registered ,what is the next step?Trading right? Yes. But do we only focus on trading and never mind the other factors included in running the biz? Definitely not!

As we are now bounded by the law we need to follow suit.

Below are just the basics that I prefer and encourage each and
every Business Owner to know and understand after registering their companies


1. Ever heard of the South African Revenue Services (SARS) and what it stands for?
This is the institution not to ignore as a Business Owner as well as a responsible citizen. I mentioned the words “LEGAL ENTITIES” on the above paragraph. Once your company is registered , you receive the documentation that details the legal entities of the company.One of this legal entity is the FINANCIAL YEAR END.The financial
year end means a month you have chosen when you register your company that you will submit your ANNUAL RETURNS to the receiver of the revenue.
For example, if you have chosen February ,this means, every year in that month you are expected to file your TAXES. What does it mean to file your taxes? You have been trading,making profit,incurring expenses, etc.so now you must prepare your Company ‘s Financial Statements according to the transactions you have recorded
during the year.This financial Statements include the following :
The Balance Sheets which determines the business position and
The Income Statements which determines the business performance.
Once this is worked out , you then submit these reports and SARS will determine how much you must pay as your tax contribution. Please note: The Tax amount will be calculated as per your Taxable amount as per the provided Calculations on your Financials, and the percentage varies from nature of the business, etc and changes every year. Currently (2016) Small Business contribute 25% of their taxable amount towards taxes.
Whether you are trading or not, you must file .If you are not trading , you must also submit, but in that case, you will file zero instead.
When you don’t file ,that means you are not in good books of the law and you will be referred to as Non-Compliant .Being non-compliant is a disadvantage as you will not be receiving the compulsory
documentation ,such as TAX CLEARANCE CERTIFICATES,etc.


2. The next one I want to highlight is CIPC, see the full name above. With this type of tax you are also expected to file annually to the institution .The difference with them is that they expect you to
file on the anniversary of the business ,meaning every registration date of the company you must file. However, their standard fee is R100.00 per year for small companies that make less than R10 million per annum.A penalty of R50.00 is charged for late submissions.The reason for your company to comply is to inform
the Commissioner that your business is still active and they still have the correct business details on their database. Failure to do so ,other than penalties added on every year, your company may be DEREGISTERED. When a company is deregistered, it means it
is no longer valid. Thus, as a Business owner you really need
to make sure that this is in order to avoid the stress of reinstating or starting registering the company from scratch.
I have witnessed many Business owners lose opportunities and watch deals passes by because they are not in good books with the law.It is frustrating and a regrettable thing to go through.You do not
need to be an expert in these fields, but you just need to understand the basics ,or you can have an Advisor,a very good Accountant or a Bookkeeper to guide you ,especially in this field.

There are many Compliance stages in Business. I just chosen the two as they are basic and compulsory for every business. Know the nature of your business, familiarise yourself with all it’s compliance or licences required to run the business, by so doing you will be placing your business ready for opportunities and beyond.

Every business must strive for growth, in fact that is the main principle and goal of the business. Therefore non-compliance tend to block your Business for development and progress.

Compiled by Miss Dee. Do you have queries? Need advices / Tips?

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