Dear Reader,

How many times have you debated with yourself about claiming VAT on a purchase you have made? VAT is complicate, here are a few VAT tips.

Think Vat doesn’t apply to your payroll?

A common mistake picked up by SARS auditors at on-site audits is that employers fail to pay over Vat on company car fringe benefits. This is one of the first areas the audit team will lock onto when they audit you, so make sure you’re paying your output tax on company cars!

Don’t underestimate the importance of retaining all your tax invoices.

Your tax invoice is the equivalent of the IRP 5 for your income tax – if you want to claim an input tax credit, you need a tax invoice. Furthermore, you must keep your records for five years!

Did you know?

That domestic air tickets are subject to Vat? If you are a registered vendor and travel on company business within SA, you can claim back the 14% Vat on your air ticket! However, international air travel, and passenger transport by road and rail don’t attract Vat, and so you can’t claim it back. Remember the Golden Rule: You can’t claim it unless you’re charged it.

Claim back Vat on your banking charges

Although financial services such as transactions by cheque payment and interest on credit loans are exempt from Vat, the service fee on your bank accounts IS Vatable, and you can claim back the Vat you pay on these amounts. South African bank charges are very high and this is one way to contribute to your overall cash flow and get something back!

A little known office expense you can claim Vat on

Do you purchase flower arrangements for your reception area? Ever send get well flowers to a sick employee? You can claim back the input tax on these everyday office expenses.

Order one of the following audible guides: 

Money – Managing the Flow – Featuring: Brian Walsh

Let’s face it; Money is still not flowing like it did before the Global Financial Crisis, so the question is really what can we do about it? In this CD Brian talks about ways of managing the flow of money – both people that owe you money and New Money as in getting better quality.

Order your copy today! Cost R 195

 

How to make more money now! - Featuring: Brian Walsh

Increase your sales significantly in the next few months. Work less, produce greater results and enjoy what you do more. This Audio program is not some get-rich-quick scheme. It is a program designed to help business owners increase revenues in a short period of time. It deals with some  new unique insights but also with the basics of effect business practice that we often forget in the chaos of running businesses in the current financial climate.

The program features four areas of focus: The 7 Insights that will Empower You, Absolute Confidence, Fair Exchange and Effective Selling.

Order your copy today! Cost R 799

 

More tax hot topics and recent updates… Take a look at some of the past articles:

• Managing your cash flow with Credit Control
• Boosting Profit
• 10 ways to avoid a cash flow crisis
• Using a Budget to monitor performance
• Profit verse cash flow
• Keeping the cash flowing in the business

 

Connect – Support – Profit:

The Network Coffee Group meets twice a month, to take a break, share our burdens and network with others. We will have guest speakers to share insightful information with us.

• 12^th April Speaker: Carrie-Anne Diniz Topic: Managing your business tax risk!
• 26^th April Speaker: Sean Collard  Topic: A person’s sustainable productivity is in their DNA

Click HERE to book online.

Please could you take the time to “Like” our FACEBOOK BUSINESS PAGE!

Send us your tax questions!

Send your Tax and Vat queries to info@centsaccountility.co.za and we will answer them in the next issue.

Carrie-Anne Diniz

CentsAccountability

©Copyright 2013,CentsAccountability. No part of this publication may be reproduced or transmitted in any form, or by means electronic or mechanical, including recording, photocopying, or via a computerized or electronic storage or retrieval system, without permission granted in writing from the publisher. The information and opinions provided in this publication are believed to be accurate and sound, based on the best judgment available to the researchers. The publisher is not responsible for any errors or omissions.

Source: Tax Bulletin – For more tax and VAT tips from some of SA’s top tax experts.

Dear Reader,

There are two common tax invoice errors people make. Let’s have a look at them and what you can do to avoid them.

1. Manage how you issue originals and copies of your tax invoices

If you lose a tax invoice, you can’t ask the supplier to issue another tax invoice for the same purchase.

But they can issue you with a copy tax invoice if it’s clearly marked with the word ‘copy’. A tax invoice copy is only acceptable if it’s printed on plain paper and is legible. If both parties agree to electronic invoicing, an email of the invoice is acceptable if it meets the electronic invoices criteria. File invoices immediately! This way you won’t lose them.

 

2. What do you do if the tax invoice is incorrect or incomplete?

If your supplier’s forgotten your Vat number on the invoice, return the invoice to your supplier to correct. If the supplier can’t correct the tax invoice, they must cancel it. They must then issue a credit note and make out a new tax invoice with all the correct details. The same applies for an incorrect credit or debit note.

Here is a tool to clear up those VAT questions you have

How many times have you debated with yourself about claiming VAT on a purchase you have made? VAT is complicate, here is a workshop dealing with VAT in the areas or accommodation, audits, bad debts, buildings, business travel, donations and many more. VAT Tips  Cost R299

 

Order one of the following audible guides: 

Money – Managing the Flow – Featuring: Brian Walsh

Let’s face it; Money is still not flowing like it did before the Global Financial Crisis, so the question is really what can we do about it? In this CD Brian talks about ways of managing the flow of money – both people that owe you money and New Money as in getting better quality.

Order your copy today! Cost R 195

 

How to make more money now! - Featuring: Brian Walsh

Increase your sales significantly in the next few months. Work less, produce greater results and enjoy what you do more. This Audio program is not some get-rich-quick scheme. It is a program designed to help business owners increase revenues in a short period of time. It deals with some  new unique insights but also with the basics of effect business practice that we often forget in the chaos of running businesses in the current financial climate.

The program features four areas of focus: The 7 Insights that will Empower You, Absolute Confidence, Fair Exchange and Effective Selling.

Order your copy today! Cost R 799

 

More tax hot topics and recent updates… Take a look at some of the past articles:

• Managing your cash flow with Credit Control
• Boosting Profit
• 10 ways to avoid a cash flow crisis
• Using a Budget to monitor performance
• Profit verse cash flow
• Keeping the cash flowing in the business

 

Connect – Support – Profit:

The Network Coffee Group meets twice a month, to take a break, share our burdens and network with others. We will have guest speakers to share insightful information with us.

• 12^th April Speaker: Carrie-Anne Diniz Topic: Managing your business tax risk!
• 26^th April Speaker: Sean Collard  Topic: A person’s sustainable productivity is in their DNA

Click HERE to book online.

Please could you take the time to “Like” our FACEBOOK BUSINESS PAGE!

Send us your tax questions!

Send your Tax and Vat queries to info@centsaccountility.co.za and we will answer them in the next issue.

Carrie-Anne Diniz

CentsAccountability

©Copyright 2013,CentsAccountability. No part of this publication may be reproduced or transmitted in any form, or by means electronic or mechanical, including recording, photocopying, or via a computerized or electronic storage or retrieval system, without permission granted in writing from the publisher. The information and opinions provided in this publication are believed to be accurate and sound, based on the best judgment available to the researchers. The publisher is not responsible for any errors or omissions.

Source: Tax Bulletin – For more tax and VAT tips from some of SA’s top tax experts.

Dear Reader,

When it comes to paying Vat, most business owners don’t realise that there are two ways you can account for Vat. Get it wrong and you could end up underpaying SARS and be liable for a hefty penalty. Here’s what you need to know about Vat accounting to ensure you’re getting it right…

There are two ways to account for Vat.  The first is the invoice basis – this is when you declare Vat to SARS on the invoices you issued and received, regardless of whether or not they’ve been paid.

The second method is the payment basis. This is where you declare Vat to SARS on all payments you’ve made and received. Essentially with this method, ‘you’d calculate your Vat according to your cashbook’.

But which VAT accounting basis is right for your business?

Not every Vat vendor can use the payment basis to account for their company’s Vat. In fact, if you’re a company, CC or Trust, SARS will force you to account for Vat using the invoice basis.

Here’s a list of Vat vendors that can use the payment basis:

• Sole traders –      a natural person trading on his own with a total income that doesn’t      exceed R2.5 million a year.
• Partnerships –      with a total income that doesn’t exceed R2.5 million a year. Please note,      all members of the partnership must be natural persons.
• An association      – such as a sports club – that doesn’t exist for gain.
• A welfare      organisation (for instance an orphanage or old age home)
• A municipality

Here is a tool to clear up those VAT questions you have

How many times have you debated with yourself about claiming VAT on a purchase you have made? VAT is complicate, here is a workshop dealing with VAT in the areas or accommodation, audits, bad debts, buildings, business travel, donations and many more. VAT Tips  Cost R299

 

Order one of the following audible guides: 

Money – Managing the Flow – Featuring: Brian Walsh

Let’s face it; Money is still not flowing like it did before the Global Financial Crisis, so the question is really what can we do about it? In this CD Brian talks about ways of managing the flow of money – both people that owe you money and New Money as in getting better quality.

Order your copy today! Cost R 195

 

How to make more money now! - Featuring: Brian Walsh

Increase your sales significantly in the next few months. Work less, produce greater results and enjoy what you do more. This Audio program is not some get-rich-quick scheme. It is a program designed to help business owners increase revenues in a short period of time. It deals with some  new unique insights but also with the basics of effect business practice that we often forget in the chaos of running businesses in the current financial climate.

The program features four areas of focus: The 7 Insights that will Empower You, Absolute Confidence, Fair Exchange and Effective Selling.

Order your copy today! Cost R 799

 

More tax hot topics and recent updates… Take a look at some of the past articles:

• Managing your cash flow with Credit Control
• Boosting Profit
• 10 ways to avoid a cash flow crisis
• Using a Budget to monitor performance
• Profit verse cash flow
• Keeping the cash flowing in the business

 

Connect – Support – Profit:

The Network Coffee Group meets twice a month, to take a break, share our burdens and network with others. We will have guest speakers to share insightful information with us.

• 12^th April Speaker: Carrie-Anne Diniz Topic: Managing your business tax risk!
• 26^th April Speaker: Sean Collard  Topic: A person’s sustainable productivity is in their DNA

Click HERE to book online.

Please could you take the time to “Like” our FACEBOOK BUSINESS PAGE!

Send us your tax questions!

Send your Tax and Vat queries to info@centsaccountility.co.za and we will answer them in the next issue.

Carrie-Anne Diniz

CentsAccountability

©Copyright 2013,CentsAccountability. No part of this publication may be reproduced or transmitted in any form, or by means electronic or mechanical, including recording, photocopying, or via a computerized or electronic storage or retrieval system, without permission granted in writing from the publisher. The information and opinions provided in this publication are believed to be accurate and sound, based on the best judgment available to the researchers. The publisher is not responsible for any errors or omissions.

Source: Tax Bulletin – For more tax and VAT tips from some of SA’s top tax experts.

Dear Reader,

One of the most common issues that confuse people is whether or not to charge Vat for a supply or service you render to another person or business. Use this failsafe rule to solve your question in two EASY steps!

Step #1: While the new law is that you must record the name and Vat number of your client on your tax invoices, to determine whether to charge Vat or not, the Vat status of the vendor/seller/supplier counts, so always look at the Vat status of the vendor first – if he’s registered for Vat, it’s a taxable supply and Vat must be levied.

Step #2: Ask yourself, is the supply an exempt supply? The list of exempt supplies is very limited:

• Passenger service by rail or road
• Financial services
• Supply by a charitable organisation of any donated goods
• Rentals on residential property
• The sale or rental of land outside SA
• Shareblock and body corporate levies – but not home owners’ associations
• Educational services
• Union membership fees
• Service of caring for children by a crèche or an after-school care centre (after-care)

Remember: If your business is only rendering exempt supplies, you may not register for Vat!

Here is a tool to clear up those VAT questions you have

How many times have you debated with yourself about claiming VAT on a purchase you have made? VAT is complicate, here is a workshop dealing with VAT in the areas or accommodation, audits, bad debts, buildings, business travel, donations and many more. VAT Tips  Cost R299

 

Order one of the following audible guides: 

Money – Managing the Flow – Featuring: Brian Walsh

Let’s face it; Money is still not flowing like it did before the Global Financial Crisis, so the question is really what can we do about it? In this CD Brian talks about ways of managing the flow of money – both people that owe you money and New Money as in getting better quality.

Order your copy today! Cost R 195

 

How to make more money now! - Featuring: Brian Walsh

Increase your sales significantly in the next few months. Work less, produce greater results and enjoy what you do more. This Audio program is not some get-rich-quick scheme. It is a program designed to help business owners increase revenues in a short period of time. It deals with some  new unique insights but also with the basics of effect business practice that we often forget in the chaos of running businesses in the current financial climate.

The program features four areas of focus: The 7 Insights that will Empower You, Absolute Confidence, Fair Exchange and Effective Selling.

Order your copy today! Cost R 799

 

More tax hot topics and recent updates… Take a look at some of the past articles:

• Managing your cash flow with Credit Control
• Boosting Profit
• 10 ways to avoid a cash flow crisis
• Using a Budget to monitor performance
• Profit verse cash flow
• Keeping the cash flowing in the business

 

Connect – Support – Profit:

The Network Coffee Group meets twice a month, to take a break, share our burdens and network with others. We will have guest speakers to share insightful information with us.

• 12^th April Speaker: Carrie-Anne Diniz Topic: Managing your business tax risk!
• 26^th April Speaker: Sean Collard  Topic: A person’s sustainable productivity is in their DNA

Click HERE to book online.

Please could you take the time to “Like” our FACEBOOK BUSINESS PAGE!

Send us your tax questions!

Send your Tax and Vat queries to info@centsaccountility.co.za and we will answer them in the next issue.

Carrie-Anne Diniz

CentsAccountability

©Copyright 2013,CentsAccountability. No part of this publication may be reproduced or transmitted in any form, or by means electronic or mechanical, including recording, photocopying, or via a computerized or electronic storage or retrieval system, without permission granted in writing from the publisher. The information and opinions provided in this publication are believed to be accurate and sound, based on the best judgment available to the researchers. The publisher is not responsible for any errors or omissions.

Dear Reader,

Wondering how best to approach that late paying client? Here are some tips on getting paid.

When you’re chasing an unpaid bill…

Make sure the client understands your point of view. Explain that you invoiced 30 days ago, the amount is now overdue and you expect to get paid by the end of the week.

Be nice, stay calm but don’t be a walkover

Certain clients will push you to the back of the queue if they think you’ll put up with it. Never apologize when making requests for payment, never get angry or irritated and speak directly and with confidence.

Be persistent

Make regular phone calls. Suggest a meeting. Get in touch — often.  Do not accept fuzzy commitments, ask for a firm time and date commitment.

If you have to deal with the accounts department, be personable

Find out the person’s name and try to understand their point of view. Do they only pay on certain days? Is the company struggling? Treat everyone with respect, including the most junior assistant — it pays off.

 

Here are some tools to help you manage your cash flow.

If you are frustrated because money is not coming in fast enough and you are struggling to pay bills then you need to attend this workshop.  Money – Managing the flow.  Cost R299

Order one of the following audible guides: 

Money – Managing the Flow – Featuring: Brian Walsh

Let’s face it; Money is still not flowing like it did before the Global Financial Crisis, so the question is really what can we do about it? In this CD Brian talks about ways of managing the flow of money – both people that owe you money and New Money as in getting better quality.

Order your copy today! Cost R 195

 

How to make more money now! - Featuring: Brian Walsh

Increase your sales significantly in the next few months. Work less, produce greater results and enjoy what you do more. This Audio program is not some get-rich-quick scheme. It is a program designed to help business owners increase revenues in a short period of time. It deals with some  new unique insights but also with the basics of effect business practice that we often forget in the chaos of running businesses in the current financial climate.

The program features four areas of focus: The 7 Insights that will Empower You, Absolute Confidence, Fair Exchange and Effective Selling.

Order your copy today! Cost R 799

 

More tax hot topics and recent updates… Take a look at some of the past articles:

• Managing your cash flow with Credit Control
• Boosting Profit
• 10 ways to avoid a cash flow crisis
• Using a Budget to monitor performance
• Profit verse cash flow
• Keeping the cash flowing in the business

 

Connect – Support – Profit:

The Network Coffee Group meets twice a month, to take a break, share our burdens and network with others. We will have guest speakers to share insightful information with us.

• 12^th April Speaker: Carrie-Anne Diniz Topic: Managing your business tax risk!
• 26^th April Speaker: Sean Collard  Topic: A person’s sustainable productivity is in their DNA

Click HERE to book online.

Please could you take the time to “Like” our FACEBOOK BUSINESS PAGE!

Send us your tax questions!

Send your Tax and Vat queries to info@centsaccountility.co.za and we will answer them in the next issue.

Carrie-Anne Diniz

CentsAccountability

©Copyright 2013,CentsAccountability. No part of this publication may be reproduced or transmitted in any form, or by means electronic or mechanical, including recording, photocopying, or via a computerized or electronic storage or retrieval system, without permission granted in writing from the publisher. The information and opinions provided in this publication are believed to be accurate and sound, based on the best judgment available to the researchers. The publisher is not responsible for any errors or omissions.

Dear Reader,

Dear  Reader,

As important is cash flow in your business is, so too is the bottom line or profit.  Here are a few tips to boost your profit.

Manage your suppliers

Don’t be afraid to ask for a discount to boost your profit. Negotiating cheaper delivery slots — away from peak hours for instance — is often a good way to bring down costs.

Manage your cash cycle by keeping accurate sales records

That way you can keep profit margins high and spot problems early on. Raw material prices going up might mean you need to increase your prices, or run a special promotion in quieter months.

Talk to customers and suppliers to find out the latest innovations and trends and what’s “hot”

Be alert to new ideas and what’s selling well in your area — can you align yourself in some way?

Make products and services repeatable wherever possible

Even if you have to discount to achieve this, it’s usually worth it for the cash flow benefits. For example, if you’re a training company selling to corporate clients, offer a mixture of training and coaching over a six-month period with a regular fee each month, rather than just a one-off session.

Encourage customers to commit to a purchase every month

You can do this either through an email alert or newsletter featuring your latest products. Better still; focus it to your customers’ individual tastes and buying preferences

 

Here are some tools to help you manage your cash flow.

If you are frustrated because money is not coming in fast enough and you are struggling to pay bills then you need to attend this workshop.  Money – Managing the flow.  Cost R299

 

Order one of the following audible guides: 

Money – Managing the Flow – Featuring: Brian Walsh

Let’s face it; Money is still not flowing like it did before the Global Financial Crisis, so the question is really what can we do about it? In this CD Brian talks about ways of managing the flow of money – both people that owe you money and New Money as in getting better quality.

Order your copy today! Cost R 195

 

How to make more money now! - Featuring: Brian Walsh

Increase your sales significantly in the next few months. Work less, produce greater results and enjoy what you do more. This Audio program is not some get-rich-quick scheme. It is a program designed to help business owners increase revenues in a short period of time. It deals with some  new unique insights but also with the basics of effect business practice that we often forget in the chaos of running businesses in the current financial climate.

The program features four areas of focus: The 7 Insights that will Empower You, Absolute Confidence, Fair Exchange and Effective Selling.

Order your copy today! Cost R 799

 

More tax hot topics and recent updates… Take a look at some of the past articles:

• 10 ways to avoid cash flow crisis
• Using a Budget to monitor performance
• Profit verse cash flow
• Keeping the cash flowing in the business

 

Connect – Support – Profit:

The Network Coffee Group meets twice a month, to take a break, share our burdens and network with others. We will have guest speakers to share insightful information with us.

• 22^th March  – Speaker:    Terry of Sales Partners
• 12^th April – Speaker:       TBA       
• 26^th April – Speaker:       Sean Collard  Topic: A person’s sustainable productivity is in their DNA

Click HERE to book online.

Please could you take the time to “Like” our FACEBOOK BUSINESS PAGE!

 

Send us your tax questions!

Send your Tax and Vat queries to info@centsaccountility.co.za and we will answer them in the next issue.

Carrie-Anne Diniz

CentsAccountability

©Copyright 2013,CentsAccountability. No part of this publication may be reproduced or transmitted in any form, or by means electronic or mechanical, including recording, photocopying, or via a computerized or electronic storage or retrieval system, without permission granted in writing from the publisher. The information and opinions provided in this publication are believed to be accurate and sound, based on the best judgment available to the researchers. The publisher is not responsible for any errors or omissions.

Dear Reader,

Whether you’re struggling with late payments or simply wanting to know how to improve your cash flow, here are some tips  designed to give you confidence that your finances are under control so you can focus on what’s important. 

Over the last 3 weeks I have focused on cash flow and budgets.  I will continue to focus on cash flow over the next few weeks as this is an important aspect in your business.  Without cash flow in your business is makes it very difficult to operate efficiently.

 

Cash flow tips

1. Regularly check your cash flow forecast to keep on track with finances and to avoid shortfalls.
2. Send out invoices promptly and be quick to chase overdue bills.
3. Get to know your customer payment dates and don’t ignore irregularities or delays — a poor paying customer might be about to go bust.
4. Avoid laying out a lot of cash for unnecessary quantities of stock.
5. Cut back on pointless spending and costs.
6. Stay on good terms with your bank or other lenders in case you need to extend credit levels or apply for finance.
7. Create a short-term cash boost by offering incentives for early purchases or quick payment.
8. Consider all funding options including hire purchase, leasing, loans and invoice discounting.
9. Assess the frequency with which you pay suppliers, tax bills and so on — is it possible to pay in installments or make terms more flexible?
10. Have a warning system in place so if you are heading towards the red, you know as soon as possible.

Here are some tools to help you manage your cash flow.

If you are frustrated because money is not coming in fast enough and you are struggling to pay bills then you need to attend this workshop.  Money – Managing the flow.  Cost R299

 

Order one of the following audible guides:

Money – Managing the Flow – Featuring: Brian Walsh

Let’s face it; Money is still not flowing like it did before the Global Financial Crisis, so the question is really what can we do about it? In this CD Brian talks about ways of managing the flow of money – both people that owe you money and New Money as in getting better quality.

Order your copy today! Cost R 195

 

How to make more money now! - Featuring: Brian Walsh

Increase your sales significantly in the next few months. Work less, produce greater results and enjoy what you do more. This Audio program is not some get-rich-quick scheme. It is a program designed to help business owners increase revenues in a short period of time. It deals with some  new unique insights but also with the basics of effect business practice that we often forget in the chaos of running businesses in the current financial climate.

The program features four areas of focus: The 7 Insights that will Empower You, Absolute Confidence, Fair Exchange and Effective Selling.

Order your copy today! Cost R 799

 

More tax hot topics and recent updates… Take a look at some of the past articles:

• Using a Budget to monitor performance
• Profit verse cash flow
• Keeping the cash flowing in the business

 

Connect – Support – Profit:

The Network Coffee Group meets twice a month, to take a break, share our burdens and network with others. We will have guest speakers to share insightful information with us.

• 8^th March - Speaker – Linda of Abundance diary
• 22^th March  - Speaker:  Terry of Sales Partners

Click HERE to book online.

Please could you take the time to “Like” our FACEBOOK BUSINESS PAGE!

 

Send us your tax questions!

Send your Tax and Vat queries to info@centsaccountility.co.za and we will answer them in the next issue.

Carrie-Anne Diniz

CentsAccountability

©Copyright 2013,CentsAccountability. No part of this publication may be reproduced or transmitted in any form, or by means electronic or mechanical, including recording, photocopying, or via a computerized or electronic storage or retrieval system, without permission granted in writing from the publisher. The information and opinions provided in this publication are believed to be accurate and sound, based on the best judgment available to the researchers. The publisher is not responsible for any errors or omissions.

Dear Reader,

For the last 2 weeks we have had a look at the importance of cash flow and the difference between cash flow and profit.  This week we will look at how you can use a budget to monitor performance in your business.

The time you spend preparing an accurate budget will be wasted unless you refer to and use it throughout the year.   After predicting what your business should achieve each month, you need to check that this is actually happening.  Having an accurate budget at the beginning of the year helps you monitor how successful the business is preforming in relation to the budget prediction. 

Implementing a budget control process

By creating a “seasonal” budget, you will soon realize it is much easier to monitor if the values are as accurate as possible.  You will be comparing actual performance against an accurately predicted budget and you won’t have to keep making allowances for seasonal differences.

This means that the calculation of a budget is the start of a long process.  A budget is a visual plan of what should happen to the business.  You need to manage and control your budget to make certain that you:

1. Achieve the projected income and expenditure
2. Do not exceed the projected expenditure

Having spent time producing a fairly accurate budget would be a waste of time if you merely file it and never refer to it again.  Monitoring a budget is like timing a horse that is running in a race in order to determine how well the horse has performed.

You can use the budget control to plan, coordinate and control the activities of the business though the following stages:

1. Set budget standards: setting standard and objectives.
2. Measure performance: measuring performance against budget requires you to check actual achieved figures continually against your budget predictions.
3. Identify problem areas: which means investigating areas which are out of line with your budget.
4. Take corrective action: requires you to take action to bring your budget back into line.

This cycle is a continuous process that is repeated on a monthly basis.  The “rule” is to review your budget at appropriate intervals for your business.  This will allow you to take corrective action as soon as possible in order to minimize the impact of any unexpected problems in the business.

Book your seat TODAY!

Money – Managing the flow. 

 

Money – Managing the Flow Featuring: Brian Walsh Let’s face it; Money is still not flowing like it did before the Global Financial Crisis, so the question is really what can   we do about it? In this CD Brian talks about ways of managing the flow of  money – both people that owe you money and New Money as in getting better quality. Order your copy today! Cost R 195

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See Sir Richard Branson, T Harv Eker, Dr John Demartini and others live on 2 & 3 March 2013.

We have some amazing and unique specials.

Click here to learn all about the event and book tickets.

Tickets are really affordable and this is a once in a lifetime event. You can pay via EFT or Credit Card. Go there now!

 

Don’t let the 28 February 2013 Provisional Tax deadline chew you up…

SARS is eagerly awaiting 2013 so it can get its hands on your first payment for the year.

It knows that there are a lot of taxpayers out there who are GOING to make mistakes this provisional tax season. Some won’t even make the deadline. Others will get hopelessly lost in the quagmire of rules, procedures, forms and calculations. Get your Provisional Tax Payment right here...

 

More tax hot topics and recent updates… Take a look at some of the past articles:

• Keeping the cash flowing in the business
• What’s the best business structure to choose for a start-up?
• Latest Tax News

 

Connect – Support – Profit:

The Network Coffee Group meets twice a month, to take a break, share our burdens and network with others. We will have guest speakers to share insightful information with us.

• 8^th March - Speaker – Linda of Abundance diary
• 29^th March  - Speaker:  Terry of Sales Partners

Click HERE to book online.

Please could you take the time to “Like” our FACEBOOK BUSINESS PAGE!

 

Send us your tax questions!

Send your Tax and Vat queries to info@centsaccountility.co.za and we will answer them in the next issue.

 

Carrie-Anne Diniz

CentsAccountability

©Copyright 2013,CentsAccountability. No part of this publication may be reproduced or transmitted in any form, or by means electronic or mechanical, including recording, photocopying, or via a computerized or electronic storage or retrieval system, without permission granted in writing from the publisher. The information and opinions provided in this publication are believed to be accurate and sound, based on the best judgment available to the researchers. The publisher is not responsible for any errors or omissions.

Dear Reader,

In last week’s newsletter I discussed the importance of having a budget and monitoring your cash flow constantly in order to run your business efficiently.  This week we will take a look at Profit versus cash flow.  What is the difference?

 

“A company can have great cash flow, but not be profitable. Amazon.com raised so much money by selling stock in the mid-1990s, that they had $2,000,000,000 in the bank. Every year, they spent more money than they made, so their yearly profit was negative. But because they had so much money saved up, they could afford to make up the difference out of their bank account. The big stock market cash inflows made up for the continual losses. Only after a decade did Amazon actually start making a profit as a company, so they now have good cash flow and are profitable.”

 

The timing of income and expenses is important.  When income exceeds expenses there will be a profit, but only if there is enough income to cover the expenses and keep the business operational.

 

As an entrepreneur you strive to make a profit in your business. Take a simple example, you buy a product for R500 and sell it for R1, 000, you make a profit of R500. However the buyer is slow in paying and it takes them 3 months to pay their account.  You still show a profit of R500, however during those 3 months you have bills and despite showing a profit you do not have the cash to pay your bills.

 

To fully understand the difference, you need familiarize yourself with:

• Accrual accounting verse cash accounting
• Converting accrual profit into cash flow profit

 

Accrual vs cash accounting

 

Without giving a lengthily explanation of accrual accounting, understand that is an essential tool in the financial management of your business.  Foremost, it shows the performance of your business over a period of time, by comparing income and expenses.

 

Regardless of your cash flow, accrual accounting recognizes income and expenses incurred.  Even though accrual accounting is the method most used, it has its drawbacks. The main disadvantage is the timing difference it creates between the recognition of income and expenses and the actual in and out flow of cash.

 

The cash accounting method records the actual cash flow through the business.  It recognizes income and expenses when cash is received or paid out of the business. This method of accounting more closely resembles your cash flow.   Download your cash flow forecast worksheet today!

 

Converting accrual profit into cash flow

Using the accrual accounting method will require a making a few adjustments in order to determine your actual cash flow.  In order to convert your accrual profit to cash flow profit you will need a balance sheet for the period under examination.

 

You can convert your accrual net profit using the following formula:

Net Profit

+    Depreciation

-       Increases (or +decreases) in Accounts Receivable (Debtors)

-       Increases (or +decreases) in Inventories

+    Increases (or – decreases) in Accounts Payable (Suppliers)

-       Decrease (or +increases) in Bank loans

= Net Cash Flow

 

These adjustments are necessary as certain account transactions are taken into account to determine your accrual net profit, even though these expenses do not require a cash outlay.

 

As you can see profit and cash flow are two entirely different concepts, each with different results. Profit looks at income and expenses at a certain point in time; cash flow however, is the movement of money in and out of the business.

Money – Managing the Flow Featuring: Brian Walsh Let’s face it; Money is still not flowing like it did before the Global Financial Crisis, so the question is really what can we do about it? In this CD Brian talks about ways of managing the flow of money – both people that owe you money and New Money as in getting better quality. Order your copy today! Cost R 195

 

Don’t let the 28 February 2013 Provisional Tax deadline chew you up…

SARS is eagerly awaiting 2013 so it can get its hands on your first payment for the year.

It knows that there are a lot of taxpayers out there who are GOING to make mistakes this provisional tax season. Some won’t even make the deadline. Others will get hopelessly lost in the quagmire of rules, procedures, forms and calculations. Get your Provisional Tax Payment right here...

More tax hot topics and recent updates… Take a look at some of the past articles:

• Keeping the cash flowing in the business
• What’s the best business structure to choose for a start-up?
• Latest Tax News

• Offer the right travel allowance      and avoid a SARS audit

 

Connect – Support – Profit:

The Network Coffee Group meets twice a month, to take a break, share our burdens and network with others. We will have guest speakers to share insightful information with us.

• 22^nd February 2013 –      Chez Gourmet

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Send us your tax questions!

Send your Tax and Vat queries to info@centsaccountility.co.za and we will answer them in the next issue.

 

Carrie-Anne Diniz

CentsAccountability

©Copyright 2013,CentsAccountability. No part of this publication may be reproduced or transmitted in any form, or by means electronic or mechanical, including recording, photocopying, or via a computerized or electronic storage or retrieval system, without permission granted in writing from the publisher. The information and opinions provided in this publication are believed to be accurate and sound, based on the best judgment available to the researchers. The publisher is not responsible for any errors or omissions.