When it comes to the South African economy, small business accounting services play a vital role in keeping most startup businesses alive and thriving. Outsourced accountants work tirelessly to allow small businesses to expand, develop growth strategies, and maintain solid financial practices.
In this article, we’ll be examining the role that small business accounting services have played in the South African accounting industry through a brief look at the history of accountancy in the country. Our nation’s financial sector has taken many twists and turns over the last while, and sometimes, it helps to examine the past when trying to improve things going forward.
South African Accountancy: A Brief History
The evolution of the accounting industry in South Africa has been characterised by vast societal changes in our country’s history, especially those brought about by colonialism. As South Africa’s economy has shifted over time, so has the state of the job market for large enterprises and small businesses.
The establishment of the Dutch East India Company came about in 1602, as the global structure of capitalism was changing. This shift brought both the Dutch and British to the Cape, influencing and shaping the structure of business over the next few centuries. Under Dutch rule, South Africa followed their methods of accounting and business. Once the British had colonised the country, these methods and practices changed again to adhere to British regulations.
Over the course of the early 1900s, many accounting corporations were created in accordance with the existing British accounting practices. After the unification of South Africa in 1910, several accounting acts were passed, as well as the formation of numerous accounting associations. Throughout the mid to late 20th century, the growth of the country’s economy largely depended on SMEs (Small and Medium Enterprises) to keep it afloat, considering the destructive effect of the apartheid system throughout all sectors of the nation.
Outsourced accountants were not common during this period, instead, companies needed a registered auditor with the PAAB (Public Accountants’ & Auditors’ Board) to survey them, as well as ensure that they followed the IFRS (International Financial Reporting Standards). However, this model proved unsuccessful, as it turned out to be unsustainable for largescale economic growth.
Once the apartheid system inevitably failed and was abolished, several laws were passed that made the landscape more accessible to non-audit accountants. This legislation gave official recognition to South African accountants and gave aspiring auditors a better chance at success.
The Need For Outsourced Accountants During COVID-19
For the first time since the housing crash of 2008, the global economy took a massive hit during the outbreak of the COVID-19 pandemic in early 2020. Over 170 countries were affected by a rapid decline in productivity and economic growth, including South Africa. Many businesses were forced to shut down and countless individuals lost their jobs, crippling the economic state of the nation.
Outsourced accountants from small business accounting services, like ours, played a massive role in sustaining and growing existing startups throughout the pandemic. Small businesses felt the brunt of the economic decline in South Africa, with nearly half of the existing enterprises having no choice but to shut down. However, the businesses that were able to survive amid restrictive lockdown regulations were aided massively by accountants. Accountants from small business accounting services helped SMEs to stay open, with a whopping 56% of small business owners attributing their survival to the assistance of accountants.
It’s no surprise that the knowledge, expertise, and experience of outsourced accountants have proved essential for the running of so many small businesses in South Africa during this period. If it wasn’t jobs being lost or SMEs shutting down during the pandemic, it was the loss of life, which was felt across the nation. The help of outsourced accountants prevented many enterprises from shutting down by providing professional advice and mapping out financial strategies to remain afloat. Accountants were able to help owners create growth plans, retain employees, and keep their businesses operational during this challenging period.
How Our Small Business Accounting Services Can Benefit You
It’s no surprise that small business accounting services have had a positive impact on our nation’s economy. Today, any successful SME has a reliable, efficient accountant working behind the scenes to ensure that the business is not only running properly but also optimising opportunities for overall growth. The wide array of tasks performed by outsourced accountants improves the way that businesses run, which in turn, helps owners earn and save more. Below are a few reasons why small business accounting services are essential:
Thoroughly Organised Data:
The financial data of a company is crucial, as it informs the owner of the status of the business’s financial health. Without the necessary information, businesses are more susceptible to financial risks, like fraud or theft, especially if these transactions are not being tracked and accounted for.
Small business accounting services are critical, as they undertake the organising and analysing of financial documents so that owners of small enterprises can avoid these potential risks. Outsourced accountants guarantee that your financial information is in good, trusted hands. Investing in small business accounting services means saving time sorting through heaps of financial documents, while simultaneously saving money by avoiding fees for missed bills or deadlines.
SARS Compliance:
SARS (South African Revenue Service) is responsible for controlling our country’s tax system under official legislation. When a South African company, big or small, exceeds a certain number of revenues within a selected period, they are required by law to be registered for VAT (Value Added Tax). Failure to adhere to South African tax laws can result in hefty and avoidable fees, and any fines incurred by small businesses can be detrimental to their financial health.
As the success of SMEs is often linked to their effective use of resources, every bit of money counts towards growing the business. At SureBooks, our small business accounting services guarantee compliance with tax laws. Our accountants will do the financial heavy lifting on your behalf, ensuring that you know exactly where your money is, where it might need to go, and all the options available to you as a business owner.
Plan Strategies For Growth:
Running a business successfully involves more than simply ensuring that your financial data is well-organised. It also means regularly seeking out opportunities to earn and save money for the business. When money is put aside, not only does it give the business capital to be used at a later stage, but it also affords an opportunity to invest in resources to expand the company. Our outsourced accountants work tirelessly to create financial strategies that will help you earn more revenue while cutting down on expenses. With the help of a professional accountant, you’ll be saving substantial amounts of money and providing yourself with greater opportunities for growth and success.
Regular Performance Check-Ups:
As a business owner, you need to be kept up to date with your business’s operations and day-to-day functioning. Accountants are essential for helping you to stay on top of business performance reports. These reports not only help you gain a better understanding of how the business is operating but will also indicate potential areas that can be improved upon to ensure financial success and growth.
Performance reports are critical, as they provide leadership with a clear, understandable breakdown of the financial operations and behind-the-scenes occurrences of the business. Accountants work with complex calculations on a regular basis, which is why it’s important to create summarised reports that help business owners put their financial practices into perspective, allowing for a more streamlined approach and greater efficiency.
Budget Planning:
When it comes to managing the finances of a small business, it isn’t possible to be ‘over-prepared’. Business owners who have certain objectives for their company can better plan and work towards these goals by hiring an accountant to create budget plans. While financial forecasting and planning are great for meeting long-term financial goals, budget plans are highly effective for immediate financial benefits and saving on unnecessary costs.
This is because budgets are typically drawn up for a specific period of time, making financial goals easier to attain and helping to manage cash flow. Additionally, budget plans keep business owners prepared for potential emergencies that could damage the business’s financial situation. Outsourced accountants can help to organise your finances in a way that leaves you with a safety net, should there be any unexpected setbacks.
How Accountants Make A Difference
An unfortunate reality that has plagued South African politics for decades is the pervasive prominence of corruption. Corruption has catastrophic effects on the national economy, hindering not only the growth of companies but also the lives of lower to middle-class citizens. When corruption goes unchecked, it can lead to widespread unemployment and poverty, as well as a considerable drop in foreign investment.
The mismanagement of funds in large corporations has had a domino effect on our nation’s greater society, further thwarting economic growth. However, accountants have the ability to alter the landscape of South African businesses as we know it. As seen during the pandemic, small business accountants have the skills and knowledge to help owners run their businesses effectively and problem-solve accordingly.
The potential to recover South Africa’s economic growth is largely in the hands of professional accountants, as they advise business owners and leaders on important decisions and ensure that corruption does not go unnoticed. The advent of cloud-based accounting and other forms of software accounting has made corruptive practices, like fraud and money laundering, even more challenging to carry out behind the scenes, especially as technology is rapidly improving.
Outsourced accountants are quickly adapting to this new technology, using it to optimise the management and growth of businesses’ finances. The automation of these crucial accounting practices makes real-time monitoring possible and accessible to accountants and business owners alike. To add to this, the introduction of this advanced accounting technology forces practitioners to be transparent in the work that they do. Today, accountants who opt for a more digital approach encourage a culture of efficiency, accessibility, and transparency.
In Conclusion
SureBooks provides small businesses with professional, efficient accounting services to help business owners excel and grow. When certain areas require close attention, handling your finances alone can take time away from other crucial aspects of your business’s operations. We know that managing a business requires ample time, money, and resources, which is why it makes sense to enlist the services of one of our small business accountants.
We offer professional small business accounting services that can help you lead your company to success. If you’re committed to efficiently saving, earning money, and encouraging growth within your company, get in touch with us today, and together, we can work to improve the financial health of your business!