When it comes to investigating accounting services for small business South Africa, one will generally find that most professionals highly encourage the service. Small businesses, especially during their early years when they are entering a new marketplace, can be financially treacherous. In fact, according to some investment scholars, it is thought that about 45% of new businesses fail within the first five years.
This failure rate, in large part, can be attributed to weak or non-existent industry-standard financial practices instituted from the get-go. The lack of stringent and effective financial principles in a business’s make-up can be related to the lack of professional financial advice offered by accounting services. This is because many entrepreneurs and new business owners underestimate the value of small business accountants and may believe that they are not an essential cost, especially when there are so many other stressful factors to consider.
At SureBooks, we are proud to be one of the most prominent accounting services for small business, South Africa. We have many years of experience and understand the importance of hiring a small business accountant early on into the business’s formation. In this article, we want to highlight just how important accounting and financial services can be by investigating several periods in which a business would benefit from accounting advice.
So, if you are willing to be convinced why the services we offer at SureBooks are so essential, read on to find out more:
Accounting Services For Small Business South Africa: Business Formation
If you have ever started a registered business of your own, you likely already understand how complex it can be. Nowadays it is not just as simple as opening a lemonade stand on a corner and charging R10 a cup. When someone is about to start a serious business venture that seeks to make profit, there are many technical aspects that must be met.
From raising capital to kickstart your business dream to developing a well-thought-out and formally structured business plan, not to mention the market research and branding tasks that need to be accomplished before your business can begin to flourish.
But where does an accountant fit in during the business formation period? Below, let us look at the critical tasks accounting services for small businesses and the ways in which SureBooks can offer assistance during this vital period:
Legal Structure
One of the essential first steps a business must take when starting up is deciding on a formal legal structure that they would like to register the business as. A business structure directly influences how a new company may operate and provides third parties like the government, investors, or banks with an idea of how the company will run.
However, it is not simply about just choosing a legal structure that would suit your business best; one must also consider how this structure will influence your financial operations, and it must also be legally registered with the proper authorities. All these critical factors are what our SureBooks accountants are trained to understand and help you accomplish. Not only can they offer advice on each of the different legal structures available to you, but they can also help you register that structure with the proper authorities in the correct way.
Some of the most common business structures available to new businesses in South Africa include a sole proprietorship, a partnership, a corporation, or an S corporation structure, to name but a few. A good accountant will be able to explain to you the advantages of each and which would be most effective for you.
Initial Financial Planning
Another place accounting services for small business South Africa and SureBooks can offer help is during the initial financial planning process. When starting up a new company, many new owners neglect proper financial planning. This can leave the business highly vulnerable to unforeseen circumstances later. Furthermore, without a thorough financial plan in place, it may be hard for a business to access funding from banks or investors.
So, let us look at a few of the critical processes of the initial financial planning period that our SureBooks accountants will happily advise you on and perform for you:
Startup Cost Estimation: This is an important piece of planning that measures the realistic cost that is needed to start your business. With an accountant’s help, multiple factors will be taken into consideration, including the price of licensing, the cost of equipment and supplies, what office space may cost, and how much inventory will be needed. A SureBooks accountant will not only provide a realistic cost breakdown of each of these factors but will also categorise them, making it easier for new owners to understand how their money will be spent.
Breakeven Analysis: Understanding at what point your company will no longer be incurring a loss and at what stage a business can expect to breakeven (where costs meet income and equal zero) and later when profits can be expected is important to understand. These projections can help convince investors of the company’s profitability. An accountant will be able to provide you with an effective and accurate projection of these data points by helping calculate the breakeven point and how you should set your prices.
These are only a few services that an accountant can offer you during financial planning, but they will also assist you in revenue projects, budget creation, funding strategies, and helping you understand any immediate financial risks.
Tax Season
After your business has started up and many of the financial processes above have been handled and registered with the proper authorities, your company can finally operate within its designated market. We have already seen how important accounting services for small business South Africa and SureBooks offers can be when starting a business. But this will not be the only time you will need to make use of their expertise.
One thing that is constant in any country and marketplace for every business that operates is the legal obligation to perform their tax duties responsibly and correctly. Tax law is a field of study that many accountants and lawyers have spent their whole career studying to better understand. This shows you just how complicated taxes can be, and that is why small business accounting services are recommended, especially for new businesses.
Preparing And Filing
One of the most important and basic tasks a business must complete on an annual basis is the preparation and filing of tax returns with the relevant authorities. Within South Africa, this authority is referred to as SARS (South African Revenue Service). They oversee all tax returns within the country.
The first complication is that your taxes and the documentation that needs to be prepared each year are highly dependent on what your company’s legal structure is, what markets you operate in, how many employees you have, and whether you operate internationally. These factors and more will determine what documentation you may need to include in your tax filings. Luckily, your small business accountant will be trained to know exactly what documentation is relevant and required for your personal situation.
However, generally there is some common tax return documentation that all businesses must file, and this includes income tax returns, provisional tax returns, Value Added Tax (VAT) returns, employer tax (in South Africa referred to as PAYE), and dividend taxes.
Deductions And Credits
For many small and new businesses, one critical skill that needs to be learnt early on is to save money wherever possible. In this article, we have suggested making use of accounting services for small business, South Africa. A SureBooks accountant will be able to help you save money when it comes to your taxes, by making sure to maximise the deductions and credits that South African tax law provides.
Some common deductions and credits your small business accountant will be able to help you file for include legal fees, insurance premiums, advertising costs, repairs and maintenance, employment tax incentives and small business corporation tax rates, to name but a few. If these are filed correctly, you can save a lot of money on taxes.
Audits
Having stringent financial policies in place from the inception of your business and having your taxes filed correctly every year are important ways in which accountants can provide massive benefits to your small business. However, an accountant’s advice and expertise are most likely to be tested when your company faces an audit.
There are many types of audits that can be performed on your business, depending on the market in which you operate and the relevant boards of authority that are attached to those industries. An audit can be defined as a process by which an independent party examines financial records and statements to make sure that the company is being honest in its earning and expenditure reports and that operational procedures are in line with the relevant authorities’ laws and regulations.
Let’s examine how accounting services for small business, South Africa can help in this regard:
Audit Preparation
Because audits can test the effectiveness of an accountant as well, it is important that you let your small business accountant help you prepare properly for any audit. They will help you reflect on your current financial position in order to make sure things are accurately portrayed before the relevant authorities perform their audit.
During an audit preparation procedure, your small business accountant will help organise financial records, ensuring that they are compliant with relevant tax regulations. They will also help update and prepare your most recent financial statements. Any good accountant during the work they do will also leave an easy-to-follow audit trail, which they will consolidate before the audit. But most importantly, our friendly SureBooks accountants’ area is there to help provide guidance during this stressful period.
Post-Audit Follow-Up
Our accounting services for small business, South Africa will not only be there through the audit process but will be there afterwards to help you work through the audit’s findings. Findings are generally areas of your business that the auditor has marked as problematic or may need changes going forward. Audits can be categorised as small, large, or serious. Serious audit findings may carry with them some legal repercussions. However, if you have a good accountant like those from SureBooks, you are sure to avoid these.
During a post-audit follow-up, your small business accountant will help you set up an action plan for resolving any urgent audit findings and help you implement the important corrective actions needed so that these findings do not happen in the future.
Accounting Services For Small Business South Africa: In Conclusion
In this article, we examined the many important ways that small business accountants can help you at any point in your business’s life cycle. Whether it for the startup of your business every year during tax season or when your company is being tested by audits, our SureBooks accountants are sure to be there to help you get through it all.
So, if you are looking for professional accounting services for small business South Africa has to offer, look no further than SureBooks. Visit our website today and learn more about the many services we offer.
