If you’re starting a retail business, you might think of saving money and foregoing hiring an accountant. But in times like these, you need their insights.
An overnight decision to reshuffle South Africa’s cabinet by government can improve or erode a business in the blink of an eye. Companies discovered this a few months ago amidst a sovereign ratings downgrade by a few global financial ratings agencies. Double jeopardy at its finest.
As things stand, it’s difficult to forecast the future of South Africa’s economic growth path. But, business experts believe that the future for entrepreneurship lies in retailers and their successes. If you want to ensure your retail adventure succeeds, here’s why you need to spend some money on an accountant and accounting services.
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“According to The Global Entrepreneurship Monitor’s Annual Survey on Global Entrepreneurship, South Africa has an estimated 5 579 767 small business owners, of which nearly 80% were retailers while more than 20% were service providers. These businesses accounted for almost 12 million jobs in the country,” says Phillip Joubert, professional accountant (SA) and manager of business services and advisory at BDO South Africa.
Accountants are more than just number crunchers
“Accounting and bookkeeping has long since evolved away from a cost, a data capture and a statutory reporting arm of any business, and should be an important part of your day to day decision making,” says Joubert.
He says that businesses with strong accountants allow a company’s leaders to focus on the business, to grow their market shares, to expand into new markets, to employ more staff, and to empower them to take part in South Africa’s future.
“Your accountant or bookkeeper will be able to guide you through the vast volume of information that is suddenly available at your fingertips, and should be able to assist you in establishing policies, procedures and decent governance principles that are there to help you and your business to not just be sustainable in the short run, but have a decent impact on the long-term future.”
Considering that you’ll be ordering stock, dealing with customers’ orders, making payments for rent, services and utilities – an accountant can help you save vital cash and will be worth investing in as soon as possible when opening your new shop.
They are important business tools in the digital age
“With all the constant changes in the business environment, a company can no longer rely on old, outdated and historical information to make active business decisions,” Joubert says. “The company must, in order to survive, have access to real time, accurate information.”
There’s no better person to give you up-to-date information on your company’s cash flows, incomes, expenses and even capital expenditures.
Best of all, a good accountant will be able to relate those expenditures back to what’s trending in the business world to streamline your retail activities. This relies on open and honest communication between retailer and employer, and Joubert says that you’ll do well to form a sound relationship with an accountant as soon as possible.
Related: Choosing an accountant
They are great when it comes time to sort out tax
As it’s tax season again, it’s the ideal time to talk about how an accountant can help you and your new retail outlet remain tax-compliant.
“The last thing a business owner wants is to be involved in a SARS-related nightmare – being accused of tax evasion or even fraud,” associates at Colenbrander Registered Auditors and Chartered Accounts say.
They add: “Few people can say they’re genuinely on top of taxation rules and regulations, but that’s just what an accountant is there for. An accountant will go through your business with a fine-tooth comb and check to see that you’re making full use of any tax allowances and reliefs you can claim. More importantly they will make sure tax deductions haven’t been exaggerated, and ensure there hasn’t been a failure to report all earned income.”
- There’s nothing wrong with making a mistake on your taxes as a start-up, but if you disregard particular tax laws, or disregard fiduciary duties, specifically your tax filing and payment responsibilities, you can end up in hot water with SARS.
- With an accountant on your side, you can avoid missing a beat this filing season, and the next, and also glean deep insights on where your company is headed. So, are you still doubting whether it’s worth signing up for accounting services?