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8 Tips to receive your vat refund faster

In October 2016 various accounting and tax bodies asked their members to participate in a short survey to indicate whether their clients experienced delays in receiving Vat refunds from SARS.

The accounting and tax controlling bodies wanted to establish the scope of the problem, as they received a drastic increase in complains from tax practitioners about slow Vat refunds from SARS. Some taxpayers went so far as to accuse government of using their refunds as a cheap form of funding. The frustration is understandable if you take into account many taxpayers pay their Vat, PAYE and taxes on time for years and simply expect the same treatment from SARS.

SARS response was the standard. “They increased their security to protect themselves and taxpayers against fraud”

So here are some tips to ensure you get your refund quicker.

Vat refund tip 1
When you know there is a claim, submit your Vat return as soon as possible after month end. You must submit your return by the latest on the 25th day of the month following the end of the month your vat period falls in. When there is a claim, submit it on the 1st, 2nd or 3rd.

Vat refund tip 2
Ensure all your tax affairs are up to date and that no money is owed to SARS. The easiest way to check whether your affairs are up to date is to apply for a tax clearance certificate or to check the tax status on SARS Efiling. If it is not up to date the tax clearance will be declined. Under your tax compliant status non-compliant items will appear in red. If that is the case don’t be surprised if you experience delays.

Vat refund tip 3
Ensure bank details are correct at SARS and that the status is valid. You can check the status on SARS Efiling. A bank account should be linked to each one of your tax types PAYE/Vat/Income tax etc. If no bank account is linked to your Vat expect a delay. As an additional safety measure phone SARS’s contact centre and ask whether there is anything that may block your Vat refund. They may see something you have missed. However don’t rely on them without doing your own checking on SARS efiling. They are just human and may miss something as well.

Vat refund tip 4

Before you submit your return, ensure you have supporting documents available to show how you arrived at your output and input figures. Scan the five to ten biggest input invoices. If there are any big capital purchases scan the invoices as well. When you receive a letter from SARS informing you they are reviewing your return and need supporting documents, submit the supporting documents and workings immediately.

Vat refund tip 5
When you submit documents to SARS make it easy for the auditor. Include a letter explaining anything that may be ambigious or need further explaining. Include your contact details. Give each scanned document a proper name so the auditor can match it to your Vat workings. If you can cross reference it even better. SARS auditors are busy too and it is easier to decline your claim than to figure out how you arrived at your figures.

Vat refund tip 6

This goes with tip 3, Ensure there are no mismatches of data at SARS. Different addresses, contact numbers, and especially bank details. In the past when taxpayers applied for different types of taxes they may have used a different address at each application. A different address may exist for Vat, PAYE and Income tax. SARS does not like that. Use the merge function on SARS Efiling to rectify it before you submit your Vat claim.

Vat refund tip 7

Sometimes it is better to postpone the claiming of input tax. You have five years in which to claim an invoice for input Vat. If there is a big refund in this period, you carry a few supplier invoices over to the next period, pay in a small amount and claim the input in the next period reducing that period’s VAT liability. You in effect refund yourself – just later than you should. This is sometimes the better option especially if everything is not 100% in order and it will take you time to get it in order.

Vat refund tip 8

If you have tried everything and all else fails you have the option to approach the tax ombudsman. SARS are sometimes in the wrong and more than seventy percent of taxpayers win their case against SARS when approaching the tax ombudsman. Just ensure you have followed the correct channels before approaching that office.

What’s your experience with Vat refunds. Looking forward to your post.

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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.

Sage One Certified Adviser Cape Town

Xero certified advisor Cape Town

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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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