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Cloud Accounting

Ever considered Cloud Accounting?

Cloud accounting is  where your accounting records are kept on an internet server rather than on a computer at your office.

Here are 11 reasons why now is the right time to consider cloud accounting

  1. It is the direction things are moving. More and more software companies are pushing their clients to move in this direction. Their focus is in the cloud and it is where development will happen – giving you the client a better product.
  2. You can log into your accounts from anywhere in the world. You simply need to have internet access. That includes your mobile device should your regular internet service be down.
  3. You always work on the latest version. There are no compatability issues and no need to pay for the latest version or even worse, your version being discontinued.
  4. Backup of your data. The companies that offer cloud accounting services have more resources available than the average small to medium business person. And unlike busy business people they do not forget. If you have ever lost any data you will know how important a backup is.
  5. Security. Your data will be more secure if it sits on the servers of world class companies than yours.
  6. Corruption of data. It just does not seem to happen.
  7. It contains functions that make your life easier. It is my impression that the “old” accounting packages have been written with the accountant in mind and the new cloud based packages with the business owner in mind.
  8. The internet is much faster than in the past (and it will only get faster).
  9. It has been well tested in other parts of the world and teething problems have been ironed out.
  10. Time is money and cloud accounting saves you time.  A lot of it – in my experience anyway.
  11. Your accountants can log in anytime (if you want them to)  and keep an eye on things. This will help your accountant to do better tax planning and save you money.

If you are ready to move your accounting out of the stone age and experience the benefits of cloud accounting please give us a call (021) 557 3153.

We are doing our accounts in the cloud and have not regretted the decision one day.


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Business Rescue and Solvency

Business Rescue and Solvency Gone are the days when unsuccessful business owners jump from the one business to the other and let their creditors pay for their anyway. mistakes. Well, in theory The New Company Act requires directors of companies to take certain steps when the company they are a director of is going downhill and is heading for a position where
• the liabilities will exceed its assets (insolvent) • the company is unable to pay its debts in the normal course of business. Please note the action should be taken before the company is insolvent Once it is insolvent it is too late. Business rescue proceedings also apply to Close Corporations, but not to sole proprietors, partnerships or business trusts. The steps to be taken are called Business Rescue Proceedings. What this entails is that the company applies for a business rescue. A business rescue practitioner is appointed to take over the running of the business for a period of up to three months to see whether they can turn it around. While they are running the show the current directors are subject to their authority. What if a director does not apply for business rescue? If a director of a company allows the company to trade while insolvent and hasn’t applied for business rescue proceedings before the company became insolvent, the director is personally liable for the debts of the company. If you would like more information about the steps to follow to institute business rescue proceedings, the effect it has on employment contracts, on creditors etc. please give us a call for more information.

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Is FNB Instant Accounting for you – Part 1

Data capturing must be the most boring and time consuming part of bookkeeping and accounting -full stop. I have always felt this way and am sure you may have wished for a time when your accounting system would be smart enough to automatically post an invoice to the correct general ledger account. Only requirement is that there should be a function to approve the invoice to ensure unauthorized data does not enter the system. The era when all this is possible is here. FNB’s Instant Accounting has gone a long way to achieve automatic posting, although it is not 100% there yet However, I believe it is only a matter of time.
The question is whether it is the right accounting solution for you. System automatically allocates a lot of the transactions. If you bank with FNB the bank statements are imported. All you have to do is to ensure payments and receipts are correctly allocated. You can set up matching rules so that the system allocates transactions automatically. Here is how it works:
Lets say you pay for petrol. You can set a matching rule so that each time the word petrol appears in the description on the bank statement it is allocated to the petrol account in your general ledger. If matching rules have not been set up the transaction will remain unassigned and you can assign it yourself. Bank reconciliations For FNB accounts you do not have to do a bank reconciliation. Because the transactions are imported, the cashbook will always balance as long as you do not post manual transactions to the cashbook.
If you have accounts at other banks you still have to do bank reconciliations. At time of writing there was no function to do this online, you have to do it offline. This is a bit of a negative, but if you have some copy and paste and Excel skills you should be able to overcome this. The importance of using the right reference When making payments from your FNB Account ensure you use the correct reference, because once imported you cannot edit the reference. It is also used for matching and automatic posting purposes. No Annual License fees and no upgrade fees As long as you are a FNB customer you can use the accounting system free of charge. However this is for business accounts only- you cannot do a set of accounts if you use your private bank account for business purposes (a very bad business practice anyway). Is the service always availability and how fast is it? No, I have found that the service is not always available. Sometimes it is also too slow, but this is fortunately the exception rather than the rule and you should be able to work most of the time. How fast is the Accounting System? A lot will depend on the speed of you Internet connection, but generally I find the speed to be satisfactory. There are certain times of the month when it is slower than normal when the workload on the system is higher. The speed is not where I would like it to be but with the

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FNB Instant Accounting Problem Areas

Areas Every accounting program I have ever worked with lacked some features which I saw in another program and FNB Instant Accounting is no different. Here are some of the areas I believe where FNB Instant Accounting can improve. Speed Personally there are few things that irritate me more than a computer program that does not respond immediately when I hit the enter button on my keyboard. Speed are mainly influenced by:
1) Speed of your internet connection Internet connections are slow some times of the month even if you have an ADSL, 3G or faster connection. If you suffer from a slow internet connection stay away from any web based accounting software or get a faster connection. If you don’t you will get frustrated. 2) Speed of the FNB Instant Accounting Website I have experienced the FNB Instant Accounting to be slow at certain times of the month. Even when other websites respond lightning fast, it may take up to five second after entering a transaction before the system will record the transaction. This is one of the main reasons why some of my clients decided to discontinue its use. Recurring entries Some businesses need to do the same accounting entries on a monthly basis. A prime example is a business that owns a block of flats—the rent stays the same on a monthly basis. The only details on the invoice that need to change is the description of the month. Imagine you have 100 flats. If you have a choice between doing 100 invoices every month or setting it up once, change the description that will affect all invoices once per month and then let the system generate the invoices automatically for you which would you choose? Most accounting programs call the automatic generation of the transactions recurring batches/entries. Recurring batches/entries can save you a lot of time and at the time of writing the FNB Instant Accounting program does not have the recurring entry functionality. Hopefully this will be added in future as it is a standard function in most other accounting packages. Inventory If you need to keep track of stock stay away from Instant Accounting as the function is not available.
You can read more about FNB Instant Accountina here.

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Waiting time at SARS

When last did you have the privilege to visit a SARS Branch? Did you enjoy the experience? Most people I talk to say they were treated decently, the agent was friendly and in most cases helpful. The majority was even impressed by the system in place at SARS calling your number when you had to see an agent. But almost all had one complaint! The time they had to wait before being serviced. In some cases you sit for two, three or more hours to be helped and then it may take as little as five minutes to sort out the problem. What does this do the productivity of the country if people who are clearly active in the economy, have to spend hours sitting around (or even worse standing in a queues at SARS)? It has now been a few years that a visit to SARS can take a few hours out of your day. The question is why has this problem not been rectified. If you want to use a tagline that states °SARS at your Service’ you clearly should try and sort it out Here are just two suggestions. I can think of more, but will stick with two for now.
Train people working in your call centre better and give them the authority to sort out more problems In my humble, but I believe in this case correct opinion, a lot of the work that the people at branch level have to do could have and should have been sorter out by the call centre. The standard response by call centre agents if they cannot help you is to go to the nearest SARS branch. If you ask them what SARS’s procedure is to sort out a matter and you speak to five different agents you might get three different answers. I recently spoke to a call centre agent that told me to go into a SARS branch to get a specific form. There is a section on the website where you should be able to get the form, but the functionality on the -upgraded website’ does not work as well as it is suppose to and most certainly not as well as the older website. Now even if the website does not work as you would expect, why couldn’t he just email me the form? Appoint more people. I really hope SARS sorts out the waiting time at their branch offices soon to make the experience of taxpayers more pleasant. With the ever increasing requirements and red tape by SARS and as more taxpayers join the tax base they have their work cut out
Will it happen? Time will tell.

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Five New Year’s Resolutions for your Business

What New Year resolutions have you taken for your business? I have found that the beginning of the year is one of the best times to plan as a break normally does wanders to recharge the batteries.

Here are five to get you going. Make up your own list and more importantly take action once you have decided on a specific action.

I will spend my time better, so will my staff

As a business owner you should spend your time doing things that have the biggest impact on the bottom line of your business. Ask yourself what the most important thing is you can do right now that will have the biggest impact on the bottom line. Make yourself a list and rank the tasks on it from high to low. Now give each function on the list a certain number of points. Your goal is to reach a certain number of points each day. Penalise yourself for performing menial tasks that you should have delegated. Make it a game and have fun instead of seeing it as just another task.

Is it time for your company’s expenses to go on a diet?

Expenses have the bad habit of expanding, unless it is monitored diligently. One example is an expense for which a debit order has been signed years ago.

Analyse every single expense in your business and ask yourself how much it is contributing towards the achievement of your business goals? Is the expense really necessary? If not, it may be time to get rid of it Take an axe, sharpen it and swing hard. The exercise will do you good.

If you do not have a monthly budget, draw up a budget and compare actual performance against the budget Implement controls to ensure your staff know they are monitored. A telephone management system is just one such a control.

Increase your business knowledge and the knowledge of your staff

Knowledge can give you an edge over your competitors. As a general rule the more knowledgeable the people of a country are, the more money they make. The success of a small country like Singapore with very little natural resources is mainly attributed to the high level of knowledge of their people. What books can you read or courses can you attend to increase your knowledge. Always measure it against a specific goal you have. In business it should be to make money. Learn from people who can proof they have done what they teach and that they have achieved the results you are looking for.

Do a client survey

Can you honestly say you know exactly what your clients want? Selling to somebody who wants (and desire) what you offer is not hard, but smooth talking somebody into buying something they do not want or need is hard. Keep the survey short and easy to complete, because nobody like to spend thirty minutes of their time on something they get nothing back for in return. Just talking and asking your clients what they want is a good start.

Can you do things in a more productive way?

If you are a sales rep can you plan your trips better so that you see clients in the same area on the same day? If you work with computers a lot will a dual monitor help you to do your work faster? If your computer has become slow it may be time to clean it up. I have found a program called AVG PC Tuneup to work quite well after I have tried a few others.

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There are two new directives, first for the fast reaction mechanism aimed towards preventing VAT fraud. Second one is for the optional and temporary application of the reverse charge mechanism in relation to supplies of certain goods and services. Quick Reaction mechanism provides the legal basis to the countries that are members of the EU to integrate an emergency measure in they are in position to serious case of sudden and massive VAT fraud.

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Financial statements may be used by different stakeholders for a multitude of purposes. Owners and managers require financial statements to make important business decisions affecting its continued operations. Financial analysis is then performed on these statements, providing management with a more detailed understanding of the figures.

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Financial statements are prepared according to agreed upon guidelines. In order to understand these guidelines, it helps to understand the objectives of financial reporting. The objectives of financial reporting, as discussed in the Financial Accounting standards Board (FASB) Statement of Financial Accounting Concepts No. 1, are to provide information that

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Value Added Tax (VAT) is a tax on consumption levied in the United Kingdom by the National Government. It was introduced in 1973 and is the third largest source of government revenue after Income Tax and National Insurance. It is administered and collected by HM revenue and customs, primarily through the Value Added Tax Act 1994. VAT is levied on most goods and services provided by registered businesses in the UK and some goods and services imported from outside the European Union.

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