How To Do A Financial Health Check

1: Identify your financial goals

You are more likely to succeed in accomplishing a goal if your goals are specific, measurable, attainable, relevant, and time-specific. This means determining WHY you want to accomplish a goal, WHAT specifically you are trying to accomplish, WHEN you want to accomplish it by and HOW you will accomplish it.

For instance, if you are trying to pay off credit card debt, you need to ask yourself the following questions: What motivates you to do it? How much do you intend to pay off? By when? And how do you intend to succeed with making payments over the timeframe you’ve chosen?  Getting specific with your financial goals is the first step in performing a thorough financial check-up.

2: Understand where you currently stand financially

Understanding where you currently stand with your finances is basically you laying the path for where you are now and where you are trying to get to. It might involve kicking up a bunch of dust that will make you uncomfortable and perhaps even upset, but it’s something that must happen in order for you to move forward.

Determining your current debt, expenses, and income will help you understand what specific areas of your finances need the most attention and help you prioritize accordingly. Facing your finances and taking key steps can help you reach your financial goals.

3: Track your spending

This means taking a look at your daily transactions and expenses. Start by doing this exercise using a spending journal for 7 days and then extend it to 30 days to get a holistic view of exactly where your money is going.

Not only is this exercise eye-opening, but it also makes your finances top of mind. You’ll be thinking about how you spend your money and will be more aware of how much is leaving your bank account. Tracking your spending can also help you see where you can cut your budget. This exercise is an important part of your financial check-up.

4: Make adjustments, review your budget

Once you have an idea of where your money is going, you can make adjustments to your spending to ensure you are keeping your expenses below your income and leaving enough room to do things like pay down your debt and save for your goals. It’s important to review your budget regularly as part of your financial check-up.

Remember that budgeting takes practice, so don’t assume you’ll be perfect at budgeting on your first try. If you slip up, keep trying. It’s also a good idea to plan your budget for each month a couple of days before the month starts so you can lay things out properly in terms of what you expect to be paying for each particular month.

5: Review your savings and investments for the long-term

Next, you want to make sure you’re putting away some money in an emergency fund. This is money to buffer your finances in the event of any unplanned life circumstances (your car breaks down, you lose your job, etc.).

Set a goal to get to xxxx amount of money if you don’t already have a fund in place and then plan to grow your fund to 3 to 6 months of your basic living expenses. This way, if an emergency happens, you have this money to use instead of borrowing money or getting into debt.

It’s also very important to save for your mid and long terms goals, including your retirement. This means contributing to your employer-sponsored retirement programs, setting up your own RA, and having investments outside of your retirement plans. Diversifying your investments can help secure your financial future. Challenge yourself to max out your contributions by making 1% increments every month of every quarter until you can reach the allowed contribution limits each year.

6: Get properly insured

A crucial part of a financial check-up is reviewing your insurance policies to ensure you have enough coverage for the type of incidents that may incur. Having the right insurance policies is vital to protecting your assets. Not being properly insured can cause you expensive out-of-pocket costs that could have been prevented with the right insurance policy. Speak with your agent to be sure you understand what your insurance covers and doesn’t cover.

7: Check your credit report

When’s the last time you checked your credit report? Did you know you can pull your credit report free once a year? Your creditworthiness is used to determine your eligibility for things like cell phone contracts, renting an apartment, and being approved for loans. Having a good credit score and credit history can help you get lower interest rates, which results in you saving money! Checking your credit is an important part of a financial health check-up.

8: Review or create an estate plan

Reviewing your estate plan is a vital part of your financial health check-up. If you don’t have one in place then you need to create an estate plan to be sure your finances are in order. This plan can ensure that your wishes are carried out and that your family is financially cared for. Your estate plan will designate your beneficiaries to your assets. Without an estate plan, your assets will go into probate, which means the courts will decide how your assets will be distributed.

9: Get accountable

Now that you know exactly how to do a financial health check-up, the next thing you should consider is getting an accountability partner or partners. These are people that you share your goals with who are on the same journey as you or have accomplished something you are trying to achieve.

Their job is to keep you motivated and on track (and vice versa) when you don’t feel like it, or you aren’t having a great day, week, or month (because these things happen!) Putting your goals out there make you more likely to achieve them because other people know about them!

Regularly perform a financial check-up
Like your budget, you should do a regular financial health check-up. Set a reminder on your calendar to review your finances on specific dates. If something changes, such as your salary, a personal situation, or your debt increases, you will want to be sure to do a financial check-up. Staying on top of your money is essential to your financial wellbeing.

Compiled by Ms. Dikeledi Seoloane on behalf of Matsobanemetja Business Consulting (Pty) Ltd – Registered Accountant and Certified Tax Practitioner.

We have well trained and qualified staff that manages the aspect of both business and individual taxes.

We are the fast growing accounting service-providing agency in South Africa and across the globe.

If you need a consultation with us with regards to your business, any type of business – please reach out to us by email hello@matsobanemetja.blog

Matsobanemetja Business Consulting (Pty) Ltd offers a wide range of bookkeeping and accounting services, tailored to your business needs at an affordable price.

You may please inquire with us by sending an email to enquiries@matsobanemetja.co.za

“Beware of little expenses. A small leak will sink a great ship.”

– Benjamin Franklin

http://www.matsobanemetja.blog

INDIVIDUAL INCOME TAX & SARS E-FILING MASTERCLASS

WHAT IS INCOME TAX

We just had a masterclass webinar on Individual Income Tax Returns hosted by our sister company Bookkeeping Academy – http://www.bookkeekingacademy.org

Income tax – is a tax governments impose on the income that
businesses and individuals generate

PAYE
– Individual income tax is deducted on the employee salaries by the employer
and pay the funds to SARS via the Pay As You Earn
– Employers are required to withhold these taxes each month and pay them
over to SARS on the taxpayer’s behalf. They do this by consulting the SARS
PAYE tables which have different tax rates for employees who are paid
weekly, fortnightly or monthly.
The PAYE calculated as a result is based on the employee’s earnings and includes basic salaries, bonuses, fringe benefits
and other allowances.

IRP5
– The IRP5 certificate is a summary of all the remuneration (including
allowances and benefits) provided to an employee by an employer during a
tax year. This will exclude amounts paid outside the payroll, for example, the
reimbursement of a pure non-travel business expense that is paid to the
employee via the general ledger.
– If an employee receives benefits such as travel allowance from their
employer,they need to keep a travel log book. It will have a detailed summary
of the mileage travelled. The log book includes the dates, start travel km in a day and end km after all the business travel on a daily basis.
– Failure to keep a travel log book may result in a liability towards SARS.

Fringe Benefits
– Fringe benefits are additions to compensation that companies give their
employees. Some fringe benefits are provided to all employees, while others may be offered to executives only.
– Some benefits may include a company car, paid time off, or gym membership.
Most fringe benefits are taxable at fair market value but some benefits, such as
health and life insurance, are nontaxable.

PROVIDENT FUND
– A provident fund is a government-managed retirement savings plan that helps employees prepare for retirement. Employees and their employers contribute to the plan.
– The provident fund is administered by investment companies / Financial institutions who act as the brokers and financial advisors.
– They need to be qualified to ensure compliance.

Receiving an Additional Income
– Individuals that are paying tax via the PAYE as a result of being fully
employed, but equally receive an additional income such as rental income, selling goods or services, etc must also declare separately so they can pay tax where applicable.
– You will be required to calculate the overall income received within every tax period against expenses incurred then get taxed on the profit – referred to as a taxable income.
– Failure to declare an additional income may result in penalties and heavy tax
liabilities to SARS.

TWO POTS SYSTEM
– While it is called the two-pot system, your future retirement savings are actually split into three “pots”.
Your savings will be allocated to savings, retirement and vested pots.
You can withdraw from your savings pot once every tax year as long as you have at least R2 000 to withdraw.
– The maximum amount to withdraw is R30 000,00

– Savings pot
One third of your contributions will be saved in a savings pot that you can access once in a tax year.


– Retirement Pot
Two-thirds of your contributions will be saved in a retirement pot that you cannot access until retirement.
The two-pot system, in fact, introduces three pots, because what you have saved when the new system comes in will be held in a third pot:

– Vested Pot
This pot will hold your savings in the fund made before 1 September 2024 plus fund return on this. You will
generally be able to do with the retirement savings in this pot what you could do with your retirement
savings before 1 September 2024. So, for example, you can still take it in cash if you resign, are
retrenched or dismissed from an employer-sponsored fund, but your savings in this pot in a retirement
annuity (RA) will generally not be available until age 55.

Compiled by Ms. Dikeledi Seoloane on behalf of Matsobanemetja Business Consulting (Pty) Ltd – Registered Accountant and Certified Tax Practitioner.

We have well trained and qualified staff that manages the aspect of individual taxes efficiently under our specialty department Wedotax.

We are the fast growing accounting service-providing agency in South Africa and across the globe.

If you need a consultation with us with regards to your business, any type of business – please reach out to us by email hello@matsobanemetja.blog

Matsobanemetja Business Consulting (Pty) Ltd offers a wide range of bookkeeping and accounting services, tailored to your business needs at an affordable price.

You may please inquire with us by sending an email to enquiries@matsobanemetja.co.za

It’s income tax time again, Citizens: time to gather up those receipts, get out those tax forms, sharpen up that pencil, and stab yourself in the aorta.

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The Process of Accounts Receivable


In the pursuit of operating our businesses we also build relationships that are professional and beneficial to our entities. This includes having to offer your goods or services on credit to your customers / clients. In a form of the “Get it now and pay later” system.

Bear in mind that this is the income of the business thus it is bound to play a big effect on our cashflow hence stricter rules and clear processes need to be put in place, regulated and adhered to.

Accounts receivable states to the money owed to a business by its customers for goods or services that have been sold on credit. It is an important part of a business’s financial procedures as it represents the amount of money that is due to the company.

Accounts receivable management involves tracking and collecting payments from customers, managing credit terms and collections policies, and reconciling accounts to ensure that all payments are properly recorded and accounted for. This process can be time-consuming and resource-intensive for businesses, which is why many choose to outsource their accounts receivable services to third-party providers.

Process of Account Receivable Services

The process of accounts receivable services involves several steps, which can vary depending on the specific needs of the business. Here is an overall summary of the process:

1. Invoice generation: 
The process begins with the creation of an invoice, which includes the details of the goods or services provided, the payment terms, and the due date.

2. Invoice delivery:
The invoice is then sent to the customer via email, or another appropriate method. Some businesses may also provide customers with online portals where they can view and pay their invoices.

3. Payment processing:
Once the customer receives the invoice, they will typically make a payment according to the terms of the invoice. The accounts receivable services provider will process the payment and apply it to the right customer account.

4. Collections: 
If the customer does not pay on time, the accounts receivable services provider will begin the collections process. This may involve sending reminders and follow-up messages to the customer and negotiating payment plans or settlements.

5. Reporting: 
The accounts receivable services provider will generate regular reports on the status of accounts receivable, including ageing reports, payment histories, and customer account balances. These reports help businesses in making informed decisions about credit policies and collections strategies.

6. Customer Service: 
The accounts receivable services provider will provide customer service support to handle inquiries and disputes related to accounts receivable. They will maintain positive relationships with customers while ensuring timely payments.

In conclusion, a proper reconciliation needs to be prepared to outline all the outstanding monies. To clarify the status of the accounts and also to make sure that you keep a professional business relationship with your customers.
We also need to have an age analysis for our debtors.

Matsobanemetja Business Consulting (Pty) Ltd  provides accounts payable outsourcing services for the businesses.

If you are looking to outsource the accounts payable process service to any expert agency then you need to consider the steps they follow during the accounts payable process.

We have well trained and qualified staff that manages these aspects efficiently. We are the fast growing accounting service-providing agency in South Africa and across the globe.

Compiled by Ms. Dikeledi Seoloane on behalf of Matsobanemetja Business Consulting (Pty) Ltd – Registered Accountant and Certified Tax Practitioner.

If you need a consultation with us with regards to your business, any type of business – please reach out to us on email hello@matsobanemetja.blog

Matsobanemetja Business Consulting (Pty) Ltd offers a wide range of bookkeeping and accounting services, tailored to your business needs at an affordable price.

You may please inquire with us by sending an email to enquiries@matsobanemetja.co.za

“Beware of little expenses. A small leak will sink a great ship.”

Benjamin Franklin

Full Cycle Accounts Payable Defined

Accounting is one of the important parts of any business so is accounts payable. It is one of the critical components of accounting. A proper accounting payable process service ensures a healthy financial position of the organization and provides a better environment for growth.

Proper accounts payable helps build a better reputation for the organization.

The full cycle here considers creating and paying for all the orders in a proper stepwise process. Here, all the invoices of the organizations are processed speedily in a proper step-wise way and ensure that the payments are given before duration.

What are the general steps in the full cycle of the accounts payable process?

1. Purchase orders

A purchase order (PO) is the first step in the process that starts the purchase process. It is sent to the supplying vendor which can be either physical or digital in nature.

PO must consist of some general information like order date, description of the item, quantity, price, etc. It is important to note that PO is different from the invoice.

2. Receiving report

Once you receive the goods or services for the order given, a receiving report is given. The main information in this document includes the number of goods, list of received items, shipping details, the date of the received order, etc. Here, you can also provide different other details.

3. Vendor Invoice

After the vendor fulfills the desired requirement of the company, they need to send an official document for the payments. This document is called an Invoice which contains information like the amount that company owes to the vendor, taxes, freight or shipping charges, payment due date, etc. The accounts team needs to confirm the Invoice received and pave the way to process it further.

4. Matching all the documents

At this stage, all three documents namely – Purchase Order, Receiving the report, and vendor Invoice need to be matched. This is generally called a three-way matching to ensure that there is no error that can lead to financial loss.

In case of any discrepancies, the account payable department must get it rectified properly. Once the Invoice is proper, it is then moved forward.

5. Review & process payments

This is the last step, where a final review of the Invoice is done and approval from the concerned authority is taken before payments. The organization then finally processes the payments.

Conclusion

These are some general steps in the accounts payable process service followed in most profit organizations. Obviously, this process is not as simple as it seems when most organization experiences problems.

So, they consider accounts payable outsourcing service option where experts can work on it.  This helps them to achieve better efficiency in the accounts payable process with proper payments.

The reconciliation of the accounts payable need to be done accurately so you do not pay for the stock that it is not received in full or the damages thereof.

The invoicing party needs to either pass a credit note for the damaged stock or credit the initial invoice in full and re-invoice with the correct stock delivered.

Failure to not reconcile properly will create a loss in funds for the business.

Matsobanemetja Business Consulting (Pty) Ltd  provides accounts payable outsourcing services for the businesses.

If you are looking to outsource the accounts payable process service to any expert agency then you need to consider the steps they follow during the accounts payable process.

We have well trained and qualified staff that manages these aspects efficiently. We are the fast growing accounting service-providing agency in South Africa and across the globe.

Compiled by Ms. Dikeledi Seoloane on behalf of Matsobanemetja Business Consulting (Pty) Ltd – Registered Accountant and Certified Tax Practitioner.

If you need a consultation with us with regards to your business, any type of business – please reach out to us on email hello@matsobanemetja.blog

Matsobanemetja Business Consulting (Pty) Ltd offers a wide range of bookkeeping and accounting services, tailored to your business needs at an affordable price.

You may please inquire with us by sending an email to enquiries@matsobanemetja.co.za

“Accounting is the art of turning chaos into clarity and confusion into financial wisdom.”

– Michael Carter

Financial Terms that every business owner should know and understand

As a business owner there are a few financial terms you need to know in order to understand your finances.
I am going to break them down and explain them in plain English. Because jargon is no fun at all, and really, they aren’t difficult to understand.

1. Gross Income

Gross income is the amount of money you bring into your business in any given time frame (usually in a month, quarter or a year). It’s all the money you bring in, whether it’s for services, products, affiliate income, or anything else you can think of!  It’s the money you bring in before the deductions of expenses and taxes.

Gross income is also sometimes called “Revenue”.

2. Net Income

Net income is what you’re left with from your gross income after you take out business expenses. This is the number you really want to focus on when you’re figuring out sales goals for your business.

It is also called a taxable income – the amount of a person’s or company’s income—minus exemptions and deductions—that can be taxed.

3. Expenses

The day-to-day costs of running a business. Anything from bank charges fees and facebook ads to the cost of traveling to a business conference.

That is, any costs incurred as a result of a company’s attempted or successful revenue production

4. Receivables

A “receivable” is money that you’re owed. That invoice you sent to a client that she hasn’t paid yet? That’s a receivable.

So, while not quite as good as money actually in your bank, receivables are a good thing.

Simply terms, receivables = debtors.

5. Liabilities

While receivables are funds that people owe you, a liability is money that you owe other people.

In plain English? Liability = debt.

6. Owner’s Drawings

An owner’s drawing business money to their personal account.This can be the equivalent of a salary, or it can be as simple as lunch paid for with your company credit card.

This is important as it builds up a proper discipline between the company and its owner.

For example  if you accidentally use your business debit card for a personal purchase, you’d tag it as an owner’s draw), but for the most part, an owner’s draw is you reaping the benefit of your business, and giving yourself a paycheck.

7. Owner’s equity

The portion of a company’s assets that an owner can claim; it’s what’s left after subtracting a company’s liabilities from its assets. Owner’s equity is listed on a company’s balance sheet. Affects the balance section of the Annual reports.

All these above-mentioned jargons play a big role when it comes to any business. They will always get mentioned especially when compiling and reding7the company’s annual reports.

8. Owner’s borrowings

If the owner/shareholder withdraws money from the business, which is not marked as salary or dividend, it will be recorded as a shareholder loan as “due from shareholder.” This is the amount the shareholder has borrowed from the company and must repay.

Compiled by Ms. Dikeledi Seoloane on behalf of Matsobanemetja Business Consulting (Pty) Ltd – Registered Accountant and Certified Tax Practitioner.

If you need a consultation with us with regards to your business, any type of business – please reach out to us on email hello@matsobanemetja.blog

Matsobanemetja Business Consulting (Pty) Ltd offers a wide range of bookkeeping and accounting services, tailored to your business needs at an affordable price.

You may please inquire with us by sending an email to enquiries@matsobanemetja.co.za

“I never dreamed about success. I worked for it.”

– Estée Lauder

Small Business Taxes you must know about

1. Income Tax
– Income tax is the tax you pay on any money your business earns. Each year, you need to lodge a tax return to tell the South African Receiver of Revenue ( SARS) how much money your business has made and how much tax you are expected to pay.

This will be determined by the expenses incurred while operating the business.
If you’ve made a profit you will probably have to pay some tax. It’s best to put money aside throughout the year to help pay for your tax.

It is the reason why we encourage that you prepare the management account so you can be able to estimate the tax payable each month.

2. Sole Proprietor Tax (Self Employment Tax)
– a sole proprietor is considered an individual, and their taxable income is calculated by subtracting allowable deductions from their total income, which includes income from their trade. They account for their taxes under their individual tax numbers. They are also categorised as provisional tax payers. They basically use their profession, skills or experience to earn an income.

3. Payroll Tax (Employees’ tax)
– Employees’ tax is a system where an employer deducts employees’ tax called Pay As You Earn (PAYE) from the earnings of employees and pays it over to SARS on a monthly basis. This tax functions as a tax credit which is then set off against the final income tax liability by that employee. This happens on an annual basis. The employer will prepare a tax certificate for the employee ( IRP5) for them to confirm the estimated tax deducted over the 12 months if it is correct or not.

4. Value Added Tax
– is a consumption tax that is levied on the value added at each stage of a product’s production and distribution.
Unlike Income tax you do not automatically qualify to charge / pay VAT as a business. There are certain criteria your business should meet in order to register for VAT. We have what we call voluntary registration and compulsory registration. If the business makes a turnover of up to 50 thousands plus per year you then qualify for a voluntary registration. The compulsory registration occurs when your business turnover is over a million per year.

5. Excise Tax
– It increases the retail value of excisable goods to discourage consumption. This logic is applied to products that have a harmful effect on the health of South African people, or the local environment. For this reason, excise is often referred to by its nickname, sin-tax.

The revenue generated by these duties and levies amount to approximately ten per cent of the total revenue received by SARS.

Develop a Tax Strategy
Paying taxes is a civic duty. Due to all of the varieties of local, state and federal taxes, you might want to develop a long-term tax strategy.

Now that you know which small business taxes are most important, look for credits, deductions and corporate structures that can help you reduce your tax liability.

Compiled by Ms. Dikeledi Seoloane on behalf of Matsobanemetja Business Consulting (Pty) Ltd – Registered Accountant and Certified Tax Practitioner.

If you need a consultation with us with regards to your business, any type of business – please reach out to us on email hello@matsobanemetja.blog

Matsobanemetja Business Consulting (Pty) Ltd offers a wide range of bookkeeping and accounting services, tailored to your business needs at an affordable price.

You may please inquire with us by sending an email to enquiries@matsobanemetja.co.za


The best things in life are free, but sooner or later the government will find a way to tax them.

http://www.matsobanemetja.blog

LOOK 👀 WHAT YOU ARE MISSING OUT WHEN YOU DO NOT DO YOUR BOOKKEEPING

What to include in your small business tax deductions plus: Checklist!
           —————————————-

When you start a small business, you might not have everything figured out. You might have to wait for the money to come in to buy the extras that can improve your business.

It would be best if you were keeping an eye on all your transactions.

It is said that non-finance people when they think of record keeping, they only think of only the Income 🙂   Of course it is a joke! Please just make sure that all the transactions are considered when you do your record keeping. The income, the expenses – which means the overall cashflow, as well as the movements of goods and services. It can hurt you once tax season comes around, and you’re a jumbled mess.

If you are using an accounting software, please make sure that it links to any bank accounts you might have used for your small business so to avoid omitting some transactions. Categorization must be correct so that the tax deductions are also done correctly for you.

The golden rule is to please separate your personal affairs or finances from that of the business.

Regular record keeping also lets you do a mock tax write-up to see how much you might need to contribute to your taxes. That way you will be able to save up for your future taxes. Small businesses contribute twice for the taxes during the year whether they make enough money or not.

There are a few expenses that small business owners get confused about regarding their tax deductions.

1.  Utilities/bills

Just like any rental expense, a portion of the utilities and bills, like wi-fi and telephone bill, can be included in your small business tax deductions.

Suppose you regularly use your utilities and bills as part of your small business. In that case, you can put them towards your tax deductions. Like a typical office workspace, you can include water, electricity, trash, phone bills, and the internet as part of an overhead expense. Expenses are recorded on the Profit and Loss section of your annual reports. which means your profit, which is called the taxable income by SARS would have taken the expenses into account prior the final figure.

2. Software

As a businessperson you make use of different software programs to keep your small business running. Like Adobe Creative Suite, some are vital, while others, like website hosting, help drive customers to the business website and indirectly affect your cash in the business.

You may overlook such type of expenses, but they are big considering how many programs are vital to managing a small business.

3. Vehicles

Vehicles are a bit of a grey area for small business tax deductions. Not only can you contribute a portion of your vehicle’s cost if you use it for work. You can also include gas, polls, maintenance, insurance, and mileage.

Suppose you’re a creative business owner that needs to go places, like a wedding photographer. In that case, you should claim your car as a portion of your tax-deductible.

4. Travel

Not only is your vehicle a part of your small business tax deductions, but other traveling expenses might qualify too. If you are traveling more than 100 miles a day for business, you can also claim lodging, flights, and meals.

Vehicles will have you track your mileage as well. Still, if you have any expenses that cause you to travel extensively for work, you can claim them as part of your tax deductions. Don’t go overboard and pay for a first-class ticket and extravagant meals towards the deduction. Still, you can put some of your expenses towards your taxes.

5.  Contractors / Sub-contractors

Some businesses depend on few contractors to help them guide and develop your small business. Every time you have consulted with them; their fees have will contribute into the small business tax-deductible. You can also include these expenses when you hire subcontractors regularly for your business as well.

Usually, paying someone can be a hefty expense, so it’s no surprise that hiring help can pay off in the end.

6. Education

Education can be tricky when it comes to small business tax deductions. Learning more about being a small business owner is a significant endeavour, like purchasing business books, training skills and development programs and other materials for building a story brand. You can include all these to contribute to your tax deductions.

Ensure that your educational tax deductions apply to the industry that your small business is involved in.

 
7. Office supplies

Please include all your office supplies in your list of your expenses for the tax deduction purposes.

You can include anything that helps you run your business

8. Office furniture

To claim a portion of your home, you should have a space of your own to claim as your office space, even if it’s just a desk and a chair.

Even if you have more than a desk and chair, you’re able to claim your office furniture as a tax deduction. Business owners can also include the computer monitor in their home furniture because it helps you run your small business.

9. Staff Refreshments and Meals

You might have a meal, or a Starbucks run to meet with a client or a contractor. Don’t fret. These can go towards your small business tax deductions.

Don’t meet at the most elegant venue near you, but an inexpensive meal can be used and claimed as a business expense. Even if you are hosting a party, you can deduct the cost of the food you buy for your tax deductions.

You might not consider your expenses to be extraneous to run your small business, but everything counts when getting your taxes done right. Keeping track of your expenses with an accounting software or hiring a bookkeeper or accountant to keep track of anything, is well worth the investment to know you are doing everything you can to do things right.

As a small business owner, it’s helpful to know you have a lot of options to contribute to your tax deductions for your small business. Knowing your options can help make your tax deductions seem more plentiful than when you started your business.

Compiled by Ms. Dikeledi Seoloane on behalf of Matsobanemetja Business Consulting (Pty) Ltd – Registered Accountant and Certified Tax Practitioner.

If you need a consultation with us with regards to your business, any type of business – please reach out to us on email hello@matsobanemetja.blog

Matsobanemetja Business Consulting (Pty) Ltd offers a wide range of bookkeeping and accounting services, tailored to your business needs at an affordable price.

You may please inquire with us by sending an email to enquiries@matsobanemetja.co.za

Consistency and Accuracy


Bookkeeping requires maintaining the best possible consistency and accuracy of financial records.

The benefits of outsourcing Bookkeeping and Accounting functions in your business.

1. Cost Savings
– To succeed in business, accurate and timely financial records are vital. They can help you determine if the business is making money or losing it. Your financial records indicate if your business is financially sound or if adjustments need to be made. Outsourcing your bookkeeping can improve both the accuracy of your financial records and minimize expenses.

2. Access to skilled professionals
– Accountants/ bookkeepers work closely with other professionals such as the bankers, legal practitioners, etc). They are more likely to extend the help to their associates should the need arise. They are very much resourceful and this is beneficial to your business too!

3. Improved Cash flow
– It is always beneficial to know how well an organization manages it’s cash position. I normally refer to cashflow as the heartbeat of the business. The healthier the cashflow, the smoother the operations of the business.

4. Flexibility
– having to outsource your business bookkeeping / accounting function offers an incredible level of flexibility, making it an ideal business for those seeking a better work-life balance. As a business owner, you have enough time to focus on building and growing your entity because you will most focus on growing your clientele or customers. With the help of numbers Compiled by your bookkeeper/ accountant you are more likely to make informed decisions.

5. Free up time
– The retainer fee ensures that the hired service provider reserves time for the client in the future when there is a need for their services. Unlike a one-time contract, a retainer agreement is a long-term work-for-hire contract and thus can retain ongoing services. If your business core services are not Bookkeeping/ accounting – it will not make sense that you spend most of the business time on data capturing and preparing reports.

6. You’ll get expert advise
– It is important to understand that while accountants are invaluable when it comes to crunching numbers and tax compliance, they also assist with advisory services.
Their role is to guide you towards making informed decisions and to ensure you seek the right help when needed.

7. You’ll be compliant
– Compliance plays a big role in any business, especially the tax compliance status.
Compliance in the tax world means that taxpayers have met their legal obligations under the tax laws and includes ensuring that all the tax returns are submitted and tax liabilities are paid on time. This will also avoid getting charged penalties for the late submissions.

8. You’ll stay organised
– Regular Bookkeeping ensures that you are always up to date thus you will be ready for any opportunity that comes. The audit process tends to also run smooth should there be a need for one to be conducted.

9. Easier Tax preparation
– Good bookkeeping helps with tax planning because it provides accurate and organised financial records that are essential for calculating taxable income, identifying deductions, and ensuring compliance with tax laws. When you maintain proper bookkeeping, you have a clear and up-to-date view of your business’s financial transactions, including income and expenses.

Here’s the services included In the outsourced accounting model.

– Catch up bookkeeping
– Ongoing bookkeeping services
– Bookkeeping software
– Monthly Financial reporting
– Payroll software
– Running payroll
– Creation of a tax plan
– Paying in tax estimates according to the tax plan (huge concept here)
– Business advisory services

-Personal tax return
-Business tax return
-Personal and Business wealth coaching & guidance

These services are all predicated on a couple of meetings throughout the year, and then the accountant performing monthly bookkeeping, reporting, and updating a simple tax plan.

Compiled by Ms. Dikeledi Seoloane on behalf of Matsobanemetja Business Consulting (Pty) Ltd – Registered Accountant and Certified Tax Practitioner.

If you need a consultation with us with regards to your business, any type of business – please reach out to us on email hello@matsobanemetja.blog

Matsobanemetja Business Consulting (Pty) Ltd offers a wide range of bookkeeping and accounting services, tailored to your business needs at an affordable price.

You may please inquire with us by sending an email to enquiries@matsobanemetja.co.za

Behind every great business, there is a great bookkeeper.

EMPLOYER PAYROLL GUIDE

The main objective of a dedicated Payroll function in any organization is the satisfaction of people getting their paychecks on time, with the correct calculations.

What is the function of a payroll department?

Payroll professionals manage employees’ financial data and are typically responsible for processing paychecks and other payments, keeping time records, and handling any pay-related information for employees (like tax information, insurance deductions, or other factors that can affect an employee’s pay).

A payroll clerk’s duties include:

– Calculating pay for employees

– Using payroll software to manage employee pay and financial information

– Calculating taxes and deductions

– Producing and processing employee paychecks

– Tracking employee work time and keeping accurate records

– Initiating direct deposit payments

– Calculating unemployment or severance pay

– Verifying and resolving discrepancies in employee financial data or pay

– Keeping detailed digital or paper financial records to be reported

– Issuing pay statements and invoices

– Process, Reconciliation and distributing the financial documents and information such as EMP201, EMP501, IRP5, etc.

– Following financial reporting procedures and legal best practices as the payroll practices are guided by the department of labour.

What skills are required to be payroll clerk?

This is a highly specialized role, so there are specific skill sets that will be an asset to you in this field.

Math Skills: Although this is a highly administrative position, it also calls for very strong math skills. The payroll clerk is responsible for money going in and out to employees, so they really must be able to do financial math effectively and accurately.

Attention to Detail: Because of the emphasis on accuracy, a payroll clerk needs to be able to spot discrepancies or problems in financial documents or paychecks. Mistakes can have significant impacts on employees or the company, so an eagle eye is essential, whether the clerk is using advanced accounting software or good old-fashioned paper and calculators.

Problem Solving Skills: Part of the job is resolving issues that inevitably come up when money, math, and humans are involved. If there are discrepancies in amounts paid versus amounts owed, the clerk needs to be able to resolve the issue quickly and accurately.

What do you need to become a payroll clerk?

The baseline minimum combination is a high school degree and a stellar set of math skills, but many companies prefer their payroll clerk to have at least an associate’s degree in business, accounting, or finance.

What’s the outlook for payroll clerks?

Because these professionals have a strong and versatile set of skills and can work in any industry that has need of payroll processing, it’s a solid career choice in the financial services and administration field.

As a small business owner, please familiarize yourself with the labour laws in place. This will assist to stay out of trouble with the country’s labour law.

Requirements to register your employees for UIF, any individual that have worked for the business for more than 24 hours must be registered for UIF

At anytime the department of labour can decide to perform an audit in your business.

The below are what they will request from you as the employer :
– UIF registration number
– Proof of the Compensation Fund registration
– Copies of the employees contracts
– Copy Payslips.
– Time sheet

Registering with the Compensation Fund

According to the law ⚖️, an employer must insure his/her workers against occupational injuries or diseases contracted during the course of employment. CF is not insuring the employer’s business but, insuring the workers.

This is one of the utmost employers ‘s obligation.

Comply with the rules and regulations of the department of labour.

Matsobanemetja Business Consulting (Pty) Ltd – is an Accounting Firm that assist businesses and professionals will all their taxes need. We provide a full function.

You may please inquire with us by sending an email to enquiries@matsobanemetja.co.za

Compiled by Ms. Dikeledi Seoloane on behalf of Matsobanemetja Business Consulting (Pty) Ltd – Registered Accountant and Certified Tax Practitioner.

If you need a consultation with us with regards to your business, any type of business – please reach out to us on email hello@matsobanemetja.blog

Accounting is the art of turning chaos into clarity and confusion into financial wisdom.”

– Michael Carter

TAX BLOG: INCOME TAX AND VAT

1. Briefly explain the difference between Income Tax and Value Added Tax?
– Income tax is a direct tax levied by the governments (SARS – South African Revenue Services ) on businesses and individuals that conduct their operations inside their jurisdiction’s borders. It is a direct tax as a result of earnings/ Income.

– VAT – known as Value Added Tax. It is an indirect tax that is paid by everyone as consumers. It is charged at the goods and services. The South African rate is at 15%. Revenue is raised for the government by requiring certain traders (vendors), that carry on an enterprise to register for VAT.

2. In business, who is eligible to register for VAT ? And what are the requirements?
– There are two types of VAT registration i.e. Voluntary registration and Compulsory registration. Voluntary registration – the company must have made at least over 50k turnover per annum to qualify for the Vat registration.

Compulsory registration – the business must have made over 1 million per annum to register for the VAT.

The VAT (15%) charged by vendors on the supply of goods and services do not belong to the vendors / businesses but to the government. Thus if you have registered for VAT you are acting as an agency collecting the funds on behalf of SARS.

3. Are there any benefits you carry as a Vat registered vendor?
– Definitely not. There are no benefits because you will be acting as the collecting agency of the 15% amounts from the consumers on behalf of SARS.
The bit of enjoyment is that being a VAT registered vendor may afford you the  opportunity to trade with the state owned institutions and corporations out there. Some of the tenders would require working with the businesses that are VAT registered so that they would also like to reduce their tax liability.

N.B. Under no circumstances you should think that the Vat amounts you charge on your invoices will assist you with increasing the profit. When you work out your product or service pricing do not include the element of Vat. Vat should only be added after the invoice amount.

4. With regards to compliance, tax return submissions what are the few differences with regards to Income Tax and Vat?
– Income Tax is required to be filed every financial year end of the business. As the business is a provisional taxpayer you will be required to submit the returns twice a year. Mainly via the Provisional Tax (IRP6) and main Financial year end – Income Tax (ITR14).  Every 6 months. However with regards to the individual tax submissions, the tax season only opens once a year. For the individuals that are not provisional tax payers. The period range runs for 12 months that is from March to February of the following year.

VAT taxes are submitted every two months. You are required to calculate the VAT input against the VAT output which then the difference is paid over to SARS. They are very few times that you will receive a refund from SARS. It is structured in a manner that you will always be liable to pay. Hence you are the collecting agent.

5. What basic information do you need to be knowledgeable of as the business that is VAT registered?
– Prioritise knowing the compliance elements of this type of tax. Understanding that the paperwork/ supporting documents must always be on par with the rules and regulations of the receiver of revenue. Tax invoices must be prepared in an acceptable manner and as valid as per SARS. Otherwise, should an audit arise the invoice maybe rejected by SARS and they may add penalties to that effect. Period is also important in accounting. Make sure that your documents and transactions are dated, prepared with the utmost accuracy and timeously.

The transaction only happens when there Invoice is raised and the payment has been paid.

Careful not to declare VAT on the invoices that are unpaid.

You are only allowed to charge VAT when you are VAT registered and the VAT number has been issued. It is a criminal offence to charge VAT when you are not VAT registered.

Matsobanemetja Business Consulting (Pty) Ltd – is an Accounting Firm that assists businesses and professionals with all their taxes needs. We provide a full function.

You may please inquire with us by sending an email to enquiries@matsobanemetja.co.za

Compiled by Ms. Dikeledi Seoloane on behalf of Matsobanemetja Business Consulting (Pty) Ltd – Registered Accountant and Certified Tax Practitioner.

If you need a consultation with us with regards to your business, any type of business – please reach out to us on email PA@matsobanemetja.co.za

Tax Talk

“A person doesn’t know how much he has to be thankful for until he has to pay taxes on it.”

Anonymous