Archive for the ‘Articles’ Category
Fin24: Tax on NHI not expected in short term: A tax to fund the government’s national health insurance (NHI) system will not be introduced in the short term, deputy director general public finance in the National Treasury Andrew Donaldson was reported as saying this week. … http://t.co/Voy9kR1J
So here is something that should have been done a long time ago! A car designed and manufactured specifically for a wheelchair user. A whole lot better than a modified car. A pity that the person who wrote the article still uses the term “handicapped”… http://feedproxy.google.com/~r/GizmagEmergingTechnologyMagazine/~3/SPNSugMe6rM/
So if your practice is registered as an Incorporated Company, this will affect you.? Before these changes, it was mandatory to have your books of accounts audited on an annual basis, costing up to R20 000 per annum to do.
The new regulation allows for a determination based on a public-interest point system of your business.? If you score above a certain amount, you have to be audited. This is worked out as follows:
- A company scores 1 point for every employee
- A company scores 1 point for every R1 million in turnover per annum
- A company scores 1 point for every R1 million in third-party debt
- A company scores 1 point for every shareholder of the business
If you employ your own accountant, who does your books internally, a score above 100 points means you need to be audited. Companies that outsource their accounting function only have to undergo a compulsory annual audit if they score above 350 public-interest points.
Now we as medical practitioners would seldomly score over 100 points, and can not be silent shareholders in our practices we play an active role in the management of our practices. The regulation states that in this case only annual financial statements are needed.
It is however my opinion that choosing to voluntarily audit your books is still a strong option. My reasons being:
- An audit of one’s books, and the relevant tax advice that goes with this may well off-set the actual cost of the audit, through good business structuring and practice
- The benefit of an external control mechanism to the internal processes, management and professional attitude of all staff should not be under estimated
- If you are wanting to sell your practice in the near future, a set of audited results hold a lot of benefit
- Financiers may request audited results
I would love to hear some of your thoughts on this. If you would like to discuss the issue further, and its impact on your business, feel free to make contact through email or a comment below:
I recently came across an article published by the Mail & Guardian Online, which speaks to the global phenomenon of taking business functions out of the head office and hosting them with third parties, in the public cloud. The article then leads on to the sensitive issue of outsourcing finance and accounting functions, indicating that the global trend is expanding to this sector too.
While most small to medium-sized enterprises (SME’s) will happily outsource their web hosting or call-centre requirements, they are far more circumspect about trusting their financials to a third party, says the Mail & Guardian. This is largely due to the sensitive nature of the information. Ironically though, according to a World Wide Worx survey, 87% of SME’s use online banking services!
Payroll information is another function which can be outsourced. What organisations need to keep in mind however is that they are obliged to protect their employees’ information and data too. It is therefor imperative that companies ensure that their service provider understands the various Acts and has ensured that its solution is compliant, says Dave Philp, operations director at CRS Technologies.
So the challenges currently faced by SME’s in relation to onsite financial, payroll and tax management include:
- Keeping up with software upgrades
- Keeping up with legislative requirements
- Additional administrative staff employed
- Compliance with the electronic system requirements of the South African Revenue Service (Sars)
The benefits of taking a Business Process Outsourcing (BPO) approach include:
- Business continuity
- Business security
- Unlocking of Business efficiencies
- Service level agreements ensuring good standard and quality of service
- Legislative compliance
Source: Mail & Guardian Online
For the full Mail & Guardian article, visit http://www.mg.co.za/article/2010-03-04-accounting-in-the-cloud