Archive for the ‘Articles’ Category

September 23, 2011 @ 12:42 pm
posted by Deon

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

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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/

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September 12, 2011 @ 3:35 pm
posted by Deon

Following the changes proposed to the Companies Act, the regulations regarding the final audit threshold are now in effect.

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:

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July 12, 2011 @ 4:54 pm
posted by Deon
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mnt_ptherapy: Virtual-Reality-Based Rehab For Parkinson’s Disease Patients http://mnt.to/3Ybg #physicaltherapy

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April 6, 2011 @ 11:15 am
posted by Deon

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

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I recently attended a brilliant presentation by EsmPrins of Benguela Health. She spoke to Physiotherapy Private Practitioners on the affect the eminent Consumer Protection Act may have on their businesses. She kindly agreed to let me summarise her presentation, and here are some of the things she had to say:

When does the Consumer Protection Act come into effect

31st March 2011 is when the full Act will come into full effect. There is however a section of the Act (Section 61) which will have retrospective impact as from the 24th April 2010. This essentially means that the consumer / patient may be able to take action against you for any harm caused as result of, for example, the failure of a product supplied by you to the patient without any negligence on your side, since 24 April 2011.

Liability of the entire supply chain, being the producer or manufacturer, the importer, the distributor, the retailer, and also the service provider, is contained within this section. So be sure that the medication, consumables, devices etc. that you are issuing or prescribing to your patient is of good quality and that you give consumers adequate instructions for the usage of any products supplied, as you might be held liable for failure or adverse effects. Also remember that claims for damages can be brought up to a period of 3 years after death / injury / last date on which economic loss was suffered!

So what does this mean to the Consumer

Well it contains basically a Consumers Bill of Rights, which are enforceable, namely:

  • Right of Equality
  • Right to Privacy
  • Right to Choose
  • Right to Disclosure and Information
  • Right to Fair and Responsible Marketing
  • Right to Fair and Honest Dealing
  • Right to Fair, Just and Reasonable Terms and Conditions, and
  • Right to Fair Value, Good Quality and Safety

 

So what does this mean to the Healthcare Practitioner

Remember that while you are a provider of service, but might also be a consumer in certain of your professional relationships. Should you be a juristic person though, with an annual turnover above the threshold as determined by the Minister (expected to be in the region of R3 million per annum), then you are not protected by this Act. Safety monitoring and recall (Section 60), as well as product liability (Section 61) will nevertheless still apply.

Also bear in mind that it is not only the traditional medical intervention as we understand it that is under regulation here, but also the information, education, advice and consultation that we provide to our patients and the goods that we provide such as medicines, gels, devices like crutches, wheelchairs and braces, and consumables!

Marketing: the Act provides that this should not be misleading, exaggerated, ambiguous or deceptive.? We as healthcare practitioners are familiar with this sort of regulation from the Health Professions Council of South Africa. But here is something new? The consumer has the right to restrict unwanted direct marketing. This means that you need to offer recipients of your electronic marketing the option to opt out, or unsubscribe and record any decision of a consumer not wishing to receive printed marketing material. You will also need to check your list of potential clients who will be receiving communication from you, whether they have registered a “pre-emptive block” on a Registry (to be established by the National Consumer Commission), prohibiting you from sending them material for promotional purposes.

Bundling of goods and services: Here the Designated Service Provider arrangements may be effected. The consumer has the right to select their supplier. There should also not be conditions attached to services or goods, where the consumer is forced into a “package deal”. For example the arrangement might entail that you can get this service from me, provided you also buy certain goods or service from me or a specific 3rd party. Unless the convenience outweighs the choice, there is economic benefit, or I can offer the items at individual prices, such arrangements would be impermissible.

The consumer also has the right to return goods for a period of up to 6 months after the purchase thereof (with some exceptions). Additionally, there is an implied warranty in any transaction by the entire supply chain that goods comply with certain requirements and standards. So if you as a physiotherapist supply a pair of crutches to your patient, you are taking responsibility for this equipment too, as you form a part of that supply chain.

Unless your forms and documents are prescribed by other legislation, the information must be provided in plain language. Your business letters, statement of accounts, advertisements etc. must also contain:

  • Name, title or description under which the business is carried on
  • Indicate the primary place at which the business is carried on, and
  • If a business name is used, the name of the person to whom the business is registered

So what if I end up on the wrong side of the Act

Various offences can be committed, which could incur a fine and/or imprisonment of up to 12 months. An administrative fine can also be imposed up to a maximum of R1 million or 10% of annual turnover, which ever is the greatest.

So what do you need to do?

    • Review your conduct and practices, as well as that of your staff
    • Review your contracts
    • Review your indemnity forms
    • Review your informed consent forms
    • Ensure that your indemnity cover takes the Consumer Protection Act into account
    • Check your other insurance needs
    • Train your staff, and make them aware of the implications of this new Act.
March 22, 2011 @ 9:32 am
posted by Deon
massage I had a very interesting meeting today with a Physiotherapist who is looking at selling a part of her practice. You might ask, as I did, why she wants to do this? The answer came back, I would like to retain a current staff member who is very valuable to my practice. I would also like to ensure the long-term survival of my business, which I have spent a good 6 years building up.

We continued to explore the various options available within the current business structure of her practice, this being a solus practice.

Well in a nut shell we quickly agreed that there are not really many options in this format, other than employment or association to bring someone on board. Associating with another business or practice does have its benefits, but does not contribute directly to the growth in your own business value.

So what are the current options available to a healthcare practitioner in South Africa, under the current legislation. Well there is the option to stay as a single owner solus practice, or you could register the business as a

  • Partnership
  • Incorporated company

You cannot under the Health Professions Council of South Africa regulations, register your practice as a

  • Closed corporation
  • Pty (Ltd)

as both of these offer a degree of shelter behind the corporate vale

So where does that leave us? Well, if my auditor’s advice is anything to go by, “A partnership is a sinking ship!”I would not take it that far, but certainly try to learn some lessons from this, being:

  • If a partner ever decides to leave from the partnership (or dies), the business entity needs to be dissolved, and started again under a new name
  • The name of the business, and the business as it is,will not have a long-term life span

Here are some of the benefits of setting up the business structure as an Incorporated Company

  • You declare shares, making the ownership of the business proportionate to the number of shares you own
  • These shares can be purchased and sold. This allows for the dynamic flow of ownership of the practice, without jeopardising the longevity of the business or its on-going concern as a viable practice
  • Share value in relation to the value of the practice gives instant Return on Investment information to shareholders

Sure, so there must be a down-side to establishing an Inc. These include:

  • You will have to spend the money on registering the Inc., which can be more than registering other business structures
  • You will have to be audited yearly, which carries it’s own costs. In my experience though, a good auditor and good tax advice can often offset these additional costs

So where does that leave us? Well, if you are looking at taking your practice seriously, and want to build up a true asset which can work for you as a business, then consider an Incorporated company.

Why not make the shift from working for yourself, to owning a business?

After all, who owns whom?