Being a small business owner can be stressful. You have the responsibility of looking after your cash flow to ensure that your business has enough money to pay suppliers and employees, you also carry the responsibility of managing staff, developing your business, taking care of customers and marketing your business to prospective customers. All of these tasks can add up and you might let important things slide. One thing that you cannot let slide, is your business accounting. It is essential to make sure that you track the money that comes in and out of your business, keep up with your taxes and monitor the financial state of your business. However, what happens if you haven’t kept track of your accounting for many years and you are now looking to get it all in order? Read on to learn more, as well as how
Cloudworx can help.
The potential consequences of bad accounting practices
1. SARS Audit: If any of your tax information is found to be incorrect, you may face expensive fines and fees that could negatively affect the cash flow of your business.
2. Cash Flow Issues: You might know what your monthly costs are every month, but every now and then, unexpected costs arise, or you spend money you forget to record. These expenses could eventually have an effect on your Payroll, or your ability to pay suppliers when you end up with less money in your business than you thought you had.
3. Bad Business Decisions: If you are not sure how to understand the financial health of your business, how are you going to make accurate financial or business decisions? Keeping track of your finances is an important factor in business health.
How can our team at Cloudworx help you sort out your bad accounting?
At Cloudworx, we recommend starting with Xero’s accounting software so that we can start doing your accounting properly, as soon as possible. After we start with Xero and get you up and running, we can work on catching up on your historical financial records. As a start, we will ask you for your bank statements, and any other financial information and documentation you have that can help us get a clear picture of the current state of your books. In order to catch up, we need to be able to track all the money that has gone in and out
of your business during the time that you haven’t been doing your accounting. lt will also give us a good idea of your business’
financial health and help us determine how we should move forward. Using previous bank statements may not always be extremely accurate, but we will use these statements and other information to ensure that your business becomes compliant.
Getting tax compliant
Next, we will work on getting you tax compliant as quickly as possible, and hopefully help you avoid any penalties.
What is Tax Compliance?
Tax legislation is issued by the South African government in order to ensure that all businesses remain compliant with the various aspects of tax. Individuals and businesses need to ensure that they are aware of the current taxation laws and in doing so, they can guarantee that they will remain tax compliant.
What you need to be compliant with SARS
One important aspect we will need to ensure is that your business gets a Tax Compliance Certificate (TCC).
In order to receive a Tax Compliance Certificate, the South African Revenue Services (SARS) requires the following conditions to be met before it will be issued.
1. Your business needs to be registered for income tax before applying for the TCC.
2. You need to ensure that the business has no outstanding debt for any taxes such as income tax, VAT (Value-Added Tax), employee’s tax and more.
3. All returns need to be up to date and in process of being assessed by the South African Revenue Services.
4. Any tax reference numbers need to be active and correct
5. All registration details that have been submitted on the TCC application form, need to correctly correspond with the information that is on the SARS system.
The above requirements may sound daunting and overwhelming, but don’t worry, there
is a solution to every tax problem.
It might feel like solving your business accounting problems is an impossible task. But for years we’ve been helping small businesses get on track with their accounting and tax and stay on track. And we can do the same for your business.
Visit our website and book a meeting with a Cloudworx accountant so that we can help
you get your business’ accounting in order as soon as possible.