Getting an accountant on your side
SOFTWARE TAKES AWAY ALL THE PAIN AND MOST OF THE COSTS Accounting software has revolutionised accounting practices in the small business sector, streamlining your back and front offices and preparing your annual tax statement on the hop.
February has arrived and in exactly 19 days the SA Revenue Service (Sars) will require company income tax returns to be submitted. For most businesses in South Africa, February is the financial year end which coincidentally corresponds with the Sars tax submission deadline. Therefore, by February 28 you must have submitted your 2015 company tax returns, and as a note to entrepreneurs, the deadline is for 2015 returns not 2016. 2016 returns are only due in 2018 which gives you a full year to sort them out.
But what amazes me is how companies leave things to the last minute.
Given an entire year to put their tax affairs in order, entrepreneurs only start running around as the deadline approaches, at risk of incurring interest and penalties for late submission.
I would imagine tax accountants love this time of the year, because business soars due to the submission rush.
But I wonder why do businesses leave such an important function as tax submission so late?
Well, some say they are too busy during the entire year, while others procrastinate and others cannot keep up with day-to-day financial recording.
Fortunately for those that find themselves in this predicament, there is a solution in the form of software, accounting software to be exact.
It has been described as a revolution in small business tax and financial management.
You have probably heard of some brands, like Quickbooks, SMEtoolkit and SMEasy to name a few.
Basically these programmes help entrepreneurs with business financial management and you can either use an online platform or install the programme onto your computer. They work on the premise that you will input data on a regular basis that is relevant to the task performed.
For example, whenever you buy supplies you must input the amount and item in the expense section or whenever you receive a payment from a customer you must input the amount and client in the sales section and even when you pay employees you must input each payment.
Thereafter, at any given time, the programme can calculate all the data and give you either profit or loss and, more importantly for tax purposes, the programme can calculate how much tax you must pay as well as prepare the all-important financial statements that Sars requires. These programmes are useful and can save you much time and stress and all you have to do is diligently input all financial activities as they happen.
And, finally, they have the added advantage of being cheaper than hiring an accountant because you can pay as little as R250 per month, depending on the programme.
Munya Duvera (duvera@duveraelgroup. co.za) is founder of DuveraELGroup