Matsobanemetja Business Consulting Pty Ltd

Let’s do our books right while it’s still early in the year, shall we?

As a small business owner / entrepreneur we often focus more on the operations of the business. Though there is nothing wrong with that, we however need to remember the role the figures play in our entities. Knowing our business performance start with recording daily transactions, accurately so.

You might not have time to do all this, I encourage that you have an admin person to assist. This will help decrease the burden you will have to carry at the end of each day.

You just need to have someone who will understand what they will be doing with little supervision from your side.

Here are few bookkeeping routines that will help you run your business effectively.

1. Record your daily sales and cash payments.

This gives you an up-to-date look at your accounts, showing you the money moving in and out of your business.

2. If your business accepts cash, reconcile it against receipts.

Doing this at the end of each day helps you discover cash shortages or overages in a timely manner, so you can figure out where the money went and identify errors or theft. Having to wait for the Accounting period for this to happen it will cost you a lot.

3. Review and reconcile transactions.

If your using an accounting software and it is connected to your bank and synced daily, there’s no need to wait for your monthly bank statement. Many accounting applications simplify reconciliation by suggesting matches, so all you have to do is review and approve them. Spending a little time on this task each day is easy and eliminates a grueling month-end chore. It’s also a good time to review pending transactions for any errors or abnormalities that may be cause for concern, so you can investigate potential issues promptly.

4. Record payments you receive and deposit cash.

If you receive cash payments, deposit them daily to keep your cash flow healthy and your business account records up-to-date.

5. Record and categorize expenses.

You can just snap a picture of the receipt and jot a note about what it was for – rather than sort through a stack of receipts at the end of the month and try to remember what each one is, and if it’s a billable expense, which job or project it belongs to.

6. Record inventory you receive.

Entering inventory into your system the same day you receive it keeps your system up-to-date, giving you a more accurate look at your stock.

7. Invoice your clients.

Billing clients in a timely manner helps them pay you on time. The products or services you provided are still fresh in their minds and if there’s any discrepancy with the bill, it’s easier to talk about it now rather than a month or more after the fact. The longer you wait to bill your client, the longer it will take to get paid.

8. Pay vendors (creditors), or at least schedule bills to be paid.

When you receive bills, review them for errors and look at the terms. If your vendors offer early payment discounts, schedule the payments to take advantage of them. Otherwise, set payment reminders so you can pay your bills on time and avoid late fees.

9. Back  / Save up your data.

If you’re not using cloud-based accounting software that automatically backs up your data, back up your financial data manually every day. Doing so gives you peace of mind that you won’t lose your data if you have a hardware failure, file corruption or some other issue.

Happy trading!

Compiled by Ms. Dikeledi Seoloane on behalf of Matsobanemetja Business Consulting – Accounting Firm.
http://www.matsobanemetja.co.za

In this new year, may all entrepreneurs and small to medium enterprises commit to run their businesses professionally!

Let’s start with the most basic step to compliance i.e data entry

Starting a business requires one to have capital or resources. Most of the times we are limited because of the lack thereof. However, that should not be used as an excuse to run your business informally.

You might not have enough funds for the business to purchase an invoicing software as most of your operations are still done manually but please make use of the gadgets you have, either your smart phone / laptop and the internet to obtain proper source documents such as invoices.

How to make a professional looking invoice with all the correct information:

A. FIND A TEMPLATE, microsoft word, excel, etc, invoicing apps are available, some accept payment even!

Some stationery stores do still carry a variety of carbon copy invoices or custom invoice books can be ordered from most printing places. We encourage this one for the fast moving start-ups which do not have a point of sale yet!

B. Include standard information!

1. Header with your business info (name, address, phone number, email address, logo)
2. Client Information (contact person, business name, address, phone number, email)
3. Invoice Information. Extremely important‼️ (invoice number, date) this is especially important in the case of an audit, yet it is most often missed!
4. Payment terms and methods (pay in 30 days, accept e-transfer or credit card, etc)
Bank account details for easy transaction.
5. Itemized list of services (quantity, hours, rates, services rendered, etc)
6. Applicable taxes (subtotal, VAT charged, total)
7. Optional: Thank you note

C. Keep a copy for your own business, give a copy to your client, and consider making a 3rd copy for your bookkeeper / accountant. As the info will be used for both bank reconciliation & preparing reports.

There is absolutely no excuse why you should not run a professional business in this day and age.

Compiled by Dikeledi Seoloane on behalf of Matsobanemetja Business Consulting http://www.matsobanemetja.co.za

It’s a new year, happy 2021.

I chose partnership as our first business topic for the year. The reason is that
for some of us our goals this year is to partner with other individuals or entities to grow our portfolios / businesses. But often we get carried away by overlooking some important aspects that one need to process prior building the working relationship. It is as a results we see most of the times either the relationship does not last or end with an ugly fight.

I am just here to assist with few things that we need to look into before we even start the work.

1. Please draw a business contract
A contract will provide a guideline of what it is expected of each other in the business. The terms and conditions, responsibilities and duties to be catered by each need to be stipulated accordingly.
Remember you will be investing time, money and skills into the venture. Thus you cannot presume that you know your business partner without first discussing the matter and agreeing to a written definition.

2. Share the same Vision
It is of critical importance that you understand the drive and motivation in the business. Apart from our different personalities and culture we need to find common and solid grounds that will assist in steering the business in the same direction.
For e.g Money and fear of going into business alone cannot be reasons enough to form a partnership. The vision need to be clearly outlined.

3. Is the partnership necessary?
You both need to bring critical talents and resources to the table, which will bring a healthy partnership. How does partnering together make your business venture more successful than if you were to do it alone?

4. Know your relationship
Discuss your key questions about your relationship before the going gets tough, and you will better be prepared to weather the storms of business ownership together. This should be same as knowing each other ‘s personal values. You do not want to learn already within the relationship that your partner is not exactly what you were looking for!

5. How will you measure each other’ s contribution?
When you are feeling the stress of a new business, it’s easy to assume that your partner isn’t pulling their weight. To avoid mounting resentment, define clear and objective performance indicators from the beginning to measure each of your contributions. It will be easier to have a conversation once there is a lack of performance thereof.

6. What financial liabilities does each of you currently hold?
This is important such that you know each other ‘s personal financial liabilities as it will leave an impact on the cash flow, your Income needs and ability to obtain financial assistance – should the need arise.

A partnership should be beneficial to all parties involved thus you all need to structure it properly to avoid unnecessary conflict.

Compiled by Dikeledi Seoloane on behalf of Matsobanemetja Business Consulting – http://www.matsobanemetja.co.za

COVID-19 Lesson Learnt

It is no doubt that the current pandemic has been painful to a human kind and a much terrible experience to the world.

However there are few things that I have observed thus I refuse to just reject the current situation as a wasted experience. There are really few positive pointers I would like to make that will assist beyond COVID-19

I have learned the following:

1. Have multiple streams of Income

There is an argument being raised all the time that states ‘we cannot all be business owners’. Though i am in agreement, however that should not be the end of it. I would like to stretch it even futher and say “we are all entrepreneurs”. We are all rendering a service to a client. I chose to look at it this way: Look at the permanent employment contract that company X has offered and you had agreed to. The contract stipulates the terms and conditions of your employment, your job specs, etc in return of a compensation. This means your employer is your client, you are rendering a service in return of a remuneration called a salary. Thus this employer – employee relationship has an element of an Entrepreneur. Entrepreneurship is for everyone. You just need to learn how to sell, how to look for opportunities, how to price your service, how to negotiate and you are good to go. Do not limit yourself to just being an employee. This does not mean you can also limit your entrepreneurship to your day to day employment skills /qualifications / experience. I believe that each and everyone of us has been blessed with various skills. For e.g there are many accountants that have other skills out there and they capitalize on those, some are in network marketing, some are artists, etc. And are using this skills to earn an extra income. Use your talents to make a living as talent alone is overrated.

2. Diversify

Many companies now feel much attacked by the current situation. Correctly so. Especially those that are unable to work remotely. The lesson taught here is that if you are an employer / business owner you must also have elements of an entrepreneur. Look for ways to make extra cash. Always look for opportunities. One of our client is  running a franchise – Montessori School. Upon our conversation she said to me “I am now selling masks. I have partnered with a friend and we are making cotton masks and selling to the community in small and medium quantities”. Imagine if she had just complained about the current situation and just folded her arms? Do not limit your business to only the core nature of the business. The law allows that you can render as many services in one company irrespective of the initial core nature. This also, even under a normal circumstances will help your business with cashflow. Cashflow is the heartbeat of every business. Be encouraged to diversify!

3. Self-empowerment is important

Use this period to learn things that you wouldn’t under a normal circumstance. I have registered for an online course in Marketing. I always wanted to continue with studies especially more business focused courses but my excuse has always been I do not have enough time because I am always on the streets looking for work. By the time I get home I am tired, etc and will continuously put my plans to study on hold / postpone. I am happy that I am completing the course soon and there is so much I have learned that is already beneficial in my businesses. I have also realized that most online courses fees have been reduced to a great extent if not offered for free, so why not take advantage of those?
I was listening to the radio the other day and one of the callers is a restaurant owner, he said “I am using this time to develop new recipes so we can introduce a variety of menu items to our customers when we open”. This inspired me so much. We cannot just sit and complain. We need to come up with something from this situation.

4. Invest and Save

We really need to be allergic to living from hand to mouth. This way of life is proven to be the most dangerous thing. By now we have already learned that nothing is guaranteed in life, anything can happen anytime and that can change your status quo tremendously. I read somewhere that those that had been classifying themselves as the middle class may have just realized that they are actually poor. If your defense will be you do not earn enough money to save, maybe this will prove that point number 1. is valid.

5. Compliance

I refer mostly to business owners here. The Government have really tried by all means to assist SMEs with some relief funds to help during this period. Many business people complain about the red rape that blocks them from accessing these funds. But many do not have their compliance in order. The law requires anyone working for you more than 24 hours to be registered with UIF, many employers do not exercise this law. As much as it is incorrect to do so but their wrong doings have now backfired. These reliefs are not much but they can make a small difference in our employees lives. I therefore urge if your compliance was not on par this season can we do things differently going foward. In the meantime try to organize food parcels or whatever you can to contribute to your workers. It is exercising humanity. Let’s prioritize Ubuntu before profits!

In conclusion there are many things I have observed but I figured the above-mentioned ones as extremely important.

Compiled by Ms. Dikeledi Seoloane on behalf of Matsobanemetja Business Consulting Pty Ltd.
http://www.matsobanemetja.co.za | info@matsobanemetja.co.za

As accountants, we work with different types of business owners within various scopes in our practices. The focus today is to tackle the difference between working with an entrepreneur and a business owner from an accountant perspective.

Allow me to state the differences hereof:

Differences between Entrepreneurs and Business Owners are not vast and this is because their main objective is profit. What sets them apart is their diverse characters and how they operate their businesses.

A business owner focuses on putting out fires, and in that sense tends to be more reactive. They envision a world where employees would do their jobs, customers would pay on time, and software or equipment would function as it was designed. They are obsessed with having proper systems in place. A business owner makes decisions unintentionally that lead to themselves buying a full-time job. They often start a business from the ground and build it up, using skills that they have acquired over years of experience or through qualifications they have obtained. There are generally people who assist Business Owners in running the business while they mainly concentrate on the core functions of the business.

An Entrepreneur, on the other hand, does not necessarily acquire skills such as that of a Business Owner, instead, they have certain traits that drive them to start an operation. To be an entrepreneur you need to be goal-driven, passionate, determined and have strong work ethics. Entrepreneurs also have solid people skills, are creative, open-minded and disciplined. The reality is that most entrepreneurs work an insane amount of hours for little or nothing because they are mostly driven to either solve a problem or make it easier. As compared to business owners, they are not obsessed with having a proper system. They can work by themselves for a longer time.

Both traits of the business owner and entrepreneur are needed and essential in any kind of business to succeed. Therefore a person can be both simultaneously. You can be both an entrepreneur and business owner but not every entrepreneur is necessarily a business owner or vice versa.

What I have picked up as an accountant is that it is always easier to work with a business owner than an entrepreneur. This is not meant in a negative way though and I will explain the reason why. The fact that entrepreneurs are not obsessed with having proper systems in place, can compromise the success of their businesses. Most entrepreneurs are careless with regards to Tax compliance status, registering with regulatory bodies, etc. When you are in any form of business you need to make it a priority to know and understand your business position. You shouldn’t be forced by certain circumstances to comply. At least know how much you are making per month, your business anniversary, your company’s financial year-end, assets portfolio, monthly basic expenses, liabilities, earning a salary, etc.

A typical example, an entrepreneur will ask for a set of financial statements because they need to submit it for a tender or they are applying for some funds. The question that always arises is, how do you know you will qualify when you do not know what your turnover is? Having updated reports on a monthly basis aids you in making financial decisions, informed ones for that matter.

Though you are an entrepreneur, it is always vital to carry the role of a business owner or some aspect of it, because that will greatly benefit you as far as the growth of your business is concerned. Mainly because we operate in a country with legislative laws and institutions that are expected to follow them before they can issue any form of finance or projects.

Compiled by Ms. Dikeledi Seoloane, on behalf of Matsobanemetja Business Consulting Pty Ltd.
http://www.matsobanemetja.co.za

Basic COMPLIANCE in Business
– CIPC & SARS Annual Returns.

What to do after you have a business idea?

As we all know, a business starts with an idea. Then you gather equipment 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 our businesses in a country that has Business Laws and Companies Act(s). Once a business is registered, it means it has all the legal entities allocated to it for recognition, identity , development and for protection.

What to do after business registration?

So now that the business is registered ,what is the next step? Trading , right? Yes.
But do we only focus on trading and forget the rest? Definitely not! As Company Owners we are now binded by the law and obliged to follow suite. 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 responsible citizen as well as a Business owner. I mentioned the words “LEGAL ENTITIES” on the above paragraph. When your company is registered you receive the papework pularly known as CK 🙂 that details all the legal entities of the company which are company name, registration number, Tax number, Adress, etc.
Another one of this legal entity found on the documtation 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 at the reveicer 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 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 andThe 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: You are taxed as per you Net profit (Taxable Income) reflecting on your Income Statement.
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.
Failure to file means you are not in good books of the law and you will be referred as Non-Compliant .Being non-compliant is a disadvantage as you will not be receiving the compulsory documentation such as TAX CLEARANCE CERTIFICATES / PINS, etc.

2. The next one I want to highlight is CIPC as stated above. You are also expected to file annually to this 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 the database.Failure to do so other than penalties added on every year, your company would be DEREGISTERED. When a company is deregistered it means it is non-existence.
Thus, as a Business owner you really need to make sure that this is in order to avoid the stress of reinstating / reviving or starting from scratch in registering a new company – it is too costly.

I have witnessed many Business owners loose opportunities and watch deals pass by because they are not in good books with the law.It is frustrating and a very regrettable thing to go through .You do not need to be an expert in these fields 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.

I have tried to simplify the two but if you are still not sure and need our assistance you can send us an email enquiries@matsobanemetja.co.za

We are Matsobanemetja Business Consulting – Pty Ltd.

No business can afford to pay its founder a salary, however you are expected to draw a salary from the business as the owner. This is because you started the business with skills and experience acquired over many years. Starting a business is like pumping oxygen into an inanimate object and bringing it to life.

Why draw a salary from the business?
You withdraw a salary because, as the business owner, you are still responsible for your individual tax. You are not the business and vice versa, hence you have separate tax numbers. Being self-employed does not let you off the hook; you become the employee in your own business. The company must register for Pay As You Earn – this means all the deductions made relating to the company salaries will be withheld in correspondence to the company’s PAYE. This part of your business is referred to as ‘Payroll’. The fact that you are a small business does not exclude you from this process, in fact, these are the most basic business operations that every business owner must know and practice.

How do I pay myself / calculate my salary?
As I have initially explained – no business can afford to pay the founder on its startup phase. For obvious reasons, the business requires Capital which, as the founder, you need to organize, therefore most of the time you will compromise for its survival sake. At the same time, you cannot compromise the common practice of earning a salary as the business owner. It is advisable that you start this as early as possible. That way you get used to the process and a clear discipline will be drawn between you and the business.

How do I calculate my salary from my start up business?
I always advise that when starting your business, your first priority should be paying off your debt. You certainly do not want to have a huge financial burden when trying to focus on building the business.
You start by getting real about your personal expenses. You start by looking at the following factors:
FIXED EXPENSE: These are necessary living expenses that don’t change from month to month, such as your Rent / Bond.
VARIABLE EXPENSES: These are necessary living expenses that fluctuates month to month, such as groceries etc.
EXTRA EXPENSES: These are fixed or variable expenses that are not essential for you to live, such as eating out / entertainment.
You can therefore gauge your expenses from the abovementioned factors and transfer the same amount monthly into your personal account as a salary. Prepare your pay slip and make sure you stick to the process and the budget, irrespective of the business growth. This will help you grow the business.

For more interactions on topics such as this one, please attend our Free Compliance Workshops brought to you by Bookkeeping Fundamentals. Please visit and like our Page on Facebook – Bookkeeping Fundamentals and Instagram @bookkeeeping_fundamentals for next year’s updates.

By Ms. Dee – Founder & MD http://www.matsobanemetja.co.za

When do you know that the business is doing well?

The blog is meant for both start-ups (fairly new companies) or medium to large enterprises.

Most businesses start with a loan. The loan could be the capital which the owner ‘s money was injected into the business to start / funding acquired from various institutions / some even lucky enough are afforded the business grant.

However the loan remain a liability to the business, until such time the company has generated more income to payback the loan. Under no circumstances should the money injected into the business be referred to as the Revenue. It is borrowed money. It is the business obligation to pay the money back.

I have met businesses that assume that by acquiring business assets via credit equate to the business doing well. And that’s not the case.
However this will be the case when the loan have been paid off and the business is in full ownership of the assets obtained.

For example: Inventory bought on credit: Stock need to be sold and be converted into sales to be able to pay back the amounts owed to the suppliers. And furthermore be able to pay for the business operational expenses such as salaries, rent, taxes, etc.
This is the reason why we can never assume that by just a mere fact that there are revenues in the business then it means the business is doing well.

In short a business must be able to take care of it’s financial obligations in hope to be on full ownership of the business assets. Until the assets are paid in full, the assets purchased on credit still belongs to the seller. Thus we cannot claim success / ownership.

Here are characteristics that may symbolize that a business is doing well.

1. Revenue Is Growing.

2. Expenses Are Staying Flat.

3. Cash Balance Demonstrates Positive Long-Term Growth.

4. Debt Ratios Should Be Low.

5. Profitability Ratio Is on the Healthy Side.

6. Activity Ratios Are In-Line

Advise: Fight for a constant growth all the time. Let your profit margin grow from month to month. While you are growing the profit margin careful that the expenses do not accelerate unnecessarily. They will harm the growth.

Tip: It will be wise to pay off the obligation as quick as possible to cater for more resources, that way we will be able to measure the business growth.

Check out our next Blog soon.

Compiled by Ms Dee on behalf of Matsobanemetja Business Consulting (Pty) Ltd.

https://drive.google.com/file/d/15DHrDMiN1EXIqEJUrmEt43OjlGXpDUpM/view?usp=drivesdk

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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