- What Is a Financial Dashboard? Do You Need One?
- Customer service
- Human resources
- Customers: Your dashboard could include customer-related data such as the total number, demographics and more that assist you in tailoring your approach.
- Revenue: This includes data related to your total income alongside your monthly expenses for future budgeting.
- Net profit: This measures your net profit by product, month and employee by deducting all expenses.
- Operating cash flow: This is the amount of money generated during your day-to-day business operations to ensure you have sufficient funding.
- Accounts receivable turnover: This determines how quickly you’re getting paid for goods or services you sell on credit, tracking any significant delays in payment.
- Debt-to-equity ratio: This measures business funding growth to ensure you’re not too dependent on credit.
- Working capital: This assesses what resources can be converted to cash for payments if needed.
- Gross profit margin: This indicates whether you’re managing your labour and production supplies.
- Operating profit margin: Your company’s income is deducted from overhead costs.
- Total asset turnover: This shows whether you’re using your assets effectively.
- How Do Changes in Currency Exchange Rates Affect International Business?
- Inflation: This is the purchasing power of one currency compared with another – so where it costs a single unit of currency to buy a loaf of bread in one country, that same loaf could cost several hundred units of currency. Those countries with a lower inflation rate generally have stronger currencies.
- Public debt: Many developing countries have to borrow money to finance their economic growth. Unfortunately, where the debt is growing faster than the economy, the currency devalues.
- Political instability: As we’ve witnessed with the Russian war on Ukraine, instability events within the country devalue the local currency.
- Interest rates: Central bankers have to adjust the country’s interest rates as a way to balance the inflation and attract foreign capital. Higher interest rates increase the value of a country’s currency.
- Balance of trade: This is the difference between a country’s exports and imports, with countries that export more than they import perceived to have better economic health and better currency exchange rates.
- Investor confidence: Traders will consider factors like election outcomes, unemployment figures and other economic news for investment options. These views, however, are often short-lived and not necessarily based on fact.
Mergers and acquisitions
Travel and tourism
Buy in bulk
Transact in your currency
- The Difference Between Corporate Accounting and Financial Accounting
- Everything you Need to Know about Corporate Accounting
- How to Prepare for a COVID-19 Black Friday in South Africa
- How to Become an Accountant in South Africa
- Planning and budget meetings
- Assisting with strategic planning to control costs
- Performing independent reviews
- Checking the financial practices follow the law
- Balancing accounts and preparing financial documents
- Providing recommendations on investment opportunities
- Preparing tax returns
- Entering and monitoring financial data
- Financial Accounting 3
- Auditing 1 OR Internal Auditing
- Commercial Law
- Finance OR Management Accounting 3
“Dashboards are effective tools for ensuring shared financial comprehension and engagement among board members.” – Forbes
Tracking the financial health of any business, from small-scale start-ups to global corporations, is key to business survival. A financial dashboard is one of the most effective ways to achieve this. It illustrates key pieces of fiscal data in a graphical format, making it easily accessible to all stakeholders, regardless of their background.
Here we explain a financial dashboard, how they work, and why you need one.
What is a financial dashboard?
This is effectively a visual representation of your company’s finances, showing whether the company’s key performance indicators (KPIs) are being met. This data visualisation tool provides chief financial officers (CFOs) and various organisational stakeholders with financial details in a user-friendly format, such as a graph or chart. It’s also available in real-time. This means that any discrepancies are quickly identified and rectified.
The data is drawn from several departments, including:
What are examples of financial dashboards?
There are many ways that financial dashboards are used within an organisation to keep stakeholders constantly updated about their financial health. Here’s a look at some examples and how they’re providing insight for CFOs and more.
1. Sales and marketing financial dashboard
Sales and marketing leaders are constantly looking for ways to solve strategic challenges and formulate campaigns that will drive business growth. Through a financial dashboard, they’re able to see whether they’re on track with the next quarter’s revenue goals or not, as well as determine ways to improve performance. This is immediately evident through the KPIs on the constantly updated financial dashboard.
2. Profit and loss financial dashboard
In addition to individual departmental financial dashboards, you get an overview of your financial health with a profit and loss dashboard. This indicates whether your company is generating any revenue, allowing you to track metrics related to items like gross profit, and operating and net profit margins.
3. Customer health financial dashboard
The customer experience is key to any business’s financial health, which is why this financial dashboard is so insightful – particularly for subscription-based companies. Using this dashboard, CFOs are better able to communicate with individual teams about what challenges are facing the company, and which strategies are working.
4. Employee health financial dashboard
Just as you can’t run a business without customers, you can’t run a business without employees – and that’s where this financial dashboard comes in. Using KPIs, you can determine the revenue per employee, the costs related to hiring and training employees, and the company’s employee retention. This indicates areas where you could improve the workplace for all staff.
5. Business health financial dashboard
This provides you with a great overview of your business operations, what’s working and what’s not in financial terms. While this won’t provide you with the detail-focused insight that you get from departmental-level financial statements, it gives you a good understanding of the company’s general financial health.
What are the financial dashboard metrics?
There are many metrics that are used to assess the financial health of your organisation. Logically, these differ from company to company.
Here are some of the most notable metrics used for assessment.
What are the benefits of a financial dashboard?
Tracking your company’s financial health on a dashboard is incredibly beneficial for operations in a number of ways. By incorporating effective software that allows you to create financial dashboards, you will immediately enjoy a number of benefits.
Swift, automatic data import using software to create your financial dashboard removes the need to manually gather data. This means that you and your employees are saving time that is better spent on other business-related tasks.
Data used to create a financial dashboard is incredibly valuable, and you’ll need to share it easily with stakeholders on a regular basis. While you could go with emailing or constant meetings for data sharing, financial dashboards make this process much simpler and more effective. Everyone will have access to this valuable information in an easy-to-read format.
When you use software to create financial dashboards, you’re not relying on manual data collection. This not only saves time but also reduces the risk of human error. Just one simple input mistake can have a massive knock-on effect that will result in poor decision-making based on inaccurate data.
The shift to digital operations, the arrival of social media, and the growth of global businesses mean that there is a wealth of daily data coming in from many sources. With a financial dashboard, you’re able to consolidate all this important data in one place. This can minimise inaccuracies and give you a holistic vision of the business’s health. Easily review and share this information with all relevant stakeholders.
With a financial dashboard, you’re able to effectively track the performance of your company at any given time. You can also compare this to previous performance to ensure you’re growing and developing. All of this takes a matter of seconds!
Now that we know what a financial dashboard is and why we need it, why not get in touch? We are industry leaders who can get you started right away.
Do you work at a multi-national organisation? Are you involved in the import and export industry, or rely on foreign labour? Then you likely have to keep an eye on changes in the currency exchange rates.
This can be a difficult balancing act because there are so many factors that come into play – a war between Russia and Ukraine has an impact on European currencies which affects consumer goods prices down the line.
Here’s a look at the foreign exchange rates, their impact, and how this affects international business.
What affects the currency exchange rate?
Economists have their work cut out for them! There really are so many factors that impact the currency exchange rate on a daily basis. Here’s a look at some of the biggest influencers.
How does the currency exchange rate impact business?
The fluctuating currency exchange rate impacts us all in some way or another. Most businesses will either benefit from or lose out on sudden changes. Here’s a look at some of the ways it impacts international business and the risks involved.
If you work with foreign suppliers then an adjustment to the currency exchange rate could mean you save money if it shifts in your favour, or lose out because you’re paying more for the same goods or services. You will need to consider this well in advance as it can determine whether you order goods upfront or decide to buy as you go.
Changes in currency exchange rates also make it incredibly difficult for international businesses to perform accurate sales forecasting. Where sales might be going really well in an international branch, the amount coming in can shift drastically if the exchange rate suddenly turns against you.
Finance directors have an incredibly tough time when working out the value of assets or liabilities as they have to factor in fluctuating exchange rates. This is impactful for businesses when it comes to tax regulations as well as loans taken out in foreign currencies.
We’re all acutely aware of the rising fuel prices against the backdrop of global political instability, but this doesn’t just impact individual households but also businesses. The fluctuating exchange rate could mean a depreciation of the local currency and a rise in transportation costs and, therefore, sold goods.
The value of businesses themselves is also very much tied to the currency exchange rate. This means that a business located in a country with a stronger currency is more likely to consider mergers and acquisitions with companies located in regions with a weaker currency.
The current currency exchange rate has a massive influence on the travel and tourism industries. Where the currency depreciates, the area becomes a more attractive tourism offering as visitors will be able to get more for their money. This shows that there are actually indirect benefits of a weaker currency.
How do you manage changes in currency exchange rates?
There are several ways you can attempt to mitigate the risk presented by ever-fluctuating currency exchange. Here are some of the preferred options.
This is where you enter into an agreement with other parties that protect your business from any fluctuations in the exchange rate. This means that items such as imported or exported materials or products remain at a fixed rate. (No matter whether the exchange rate goes up or down.)
If your business has the means, it might be worth buying goods in bulk. (When they’re available at a reasonable rate.) When you go with a need-to-buy option, you’re taking the risk of an unfavourable exchange rate down the line.
Is your company in a strong competitive position? Then you might be able to negotiate for transactions in a currency of your choice. This allows you to pass the risk of currency exchange on to the supplier.
The advances in financial technology (FinTech) have made international transactions much safer and swifter which means that aren’t delays in payments. For a small upfront fee, you can pay money overseas on the day so you don’t have to worry about currency exchange rate fluctuations.
Big multinational companies even build foreign exchange fluctuations into contract clauses. This means that their revenue can be recouped when the exchange rate deviates from the agreed amount. This, once again, passes the risk onto the supplier.
It’s also important to adopt enterprise resource planning (ERP) software that allows for the management of trade in multiple currencies. The ERP software manages daily activities – accounting, procurement, compliance, project management and supply chain operations – so it’s important that it’s able to operate across currencies, and make the necessary adjustments when the foreign exchange rate fluctuates.
If you need help with these elements in your business, please feel free to contact the Omni team for assistance.
The Difference Between Corporate Accounting and Financial Accounting
When it comes to business, maintaining proper accounts is vital, but there are differences between corporate accounting and financial accounting. This will give you an overview of the two accounting types and how each can benefit an organisation.
What Is Financial Accounting?
In any company, you will find a financial accounting system that deals with preparing financial statements and retaining records of financial data. Financial accounting in a business uses charts of accounts with policies and procedures that determine how transactions are placed in these accounts. Financial accounting discloses the financial health of a business, ensuring compliance with regulatory bodies. It is more focused on informing those outside the company of the business finances.
What Is Corporate Accounting?
Also known as management or managerial accounting, corporate accounting is the system used by a business to regulate revenues and expenses while also forecasting operations based on an organisation’s financial status. This is a more internally-focused form of accounting used by companies. It allows business managers to collect information that encourages strategic planning, better resource use, and realistic goals.
What Are the Differences Between Corporate and Financial Accounting?
Both forms of accounting are hugely beneficial to business, but they differ in several ways, and your company must differentiate between the two.
– Directional Focus
In financial accounting, you’re looking at what a business has already achieved in terms of finances, as can be seen in the financial statements. However, with corporate accounting – rather than looking back over the business – you’re looking ahead by creating strategic plans, creating budgets, and estimating projected incomes and expenses.
– Projections or Facts
Financial statements from financial accounting are accurate, based on actual business done. This has to be the case as they are used by third parties to analyse a business’s finances and can’t be seen as ‘cooking the books!’ These accurate numbers are then used as a starting point for corporate accountants to create budgets and estimates for future business operations. The types of financial statements prepared include:
The income statement – or statement of financial performance – lets businesses assess and measure an entity’s financial performance from period to period of the similar entity, competitors, or the entity itself.
Also known as a financial position statement, this shows the balance of a company’s assets, liabilities, and equities at the end of a period of time.
Statement of change inequity
A statement of change inequity is a financial statement that shows the shareholder contribution, the movement in equity, and equity balance at the end of the accounting period.
Statement of cash flow
The statement of cash flow is a financial statement that shows the movement of the entity’s cash during the period. This statement helps analysts understand the cash movement in the business.
– Reporting Types
There is a specific time frame for reports related to financial accounting, and these will be distributed outside the company to financial institutions, regulators, and investors. However, corporate accounting reports, which are used internally, focus on daily operations and are written up frequently. The types of corporate accounting reports you’ll come across are:
Accounts Receivable Aging Reports
This breaks down the remaining balances of your clients into time periods so you can identify any debt collection issues.
Corporate accountants can create performance reports on everything from the entire company to individual departments and each employee for future decision-making.
Cost Corporate Accounting Reports
This determines the cost of articles manufactured, including raw materials, overhead, and labour. This gives you an accurate cost-per-item compared with the selling price.
– Legal Stipulations
When corporate accountants are putting together reports and budgets, they can do so without strict legislation because there are no legal issues related to internal accounting operations. However, when it comes to financial accounting, those involved need to follow all the country’s legal requirements or face severe penalties. The reports prepared by financial accountants are needed for external auditing processes.
– Systems Used
Within financial accounting, there is no need to consider the company’s specific system for making a profit; it’s just the outcome that is concerned. However, with corporate accounting, the system is the focus as anything that gets in the way of generating a profit needs to be analysed and rectified.
– Asset Valuation
Financial accounting will consider the value of a company’s assets and liabilities as these are needed for the accounting process. Whereas in the case of corporate accounting, the value of these items is not required for functionality, it’s all about how productive they are.
– Transactions Performed
Corporate accounting does not rely on transactions in monetary terms; however, when it comes to financial accounting, this is a primary focus.
– Certifications Types for Accountants
People looking to pursue a career in financial accounting will need a certified public accounting designation to ensure they’re fully trained in all legal requirements. However, those focusing on corporate accounting will only need a certified management accounting designation. The training differences will also mean that a financial accountant is typically paid more than a corporate accountant.
For financial accounting, you can use sophisticated software that keeps accurate records of your financial activity, with the ability to produce reports and meet legal requirements. Corporate accounting will likely need other software accounting features, including budgeting or planning.
Why Is Financial Accounting Important to Business?
The bottom line for all businesses is, effectively, financial accounting. It outlines how a company is doing in terms of productivity, which can be used to analyse a business’s overall health. Here are some ways it impacts decision-making.
1. It Guides Investors
Before investing in any organisation, individuals and businesses will want to look at the company’s financial statements, including the balance sheet, cash flow, and income statements. These allow both analysts and investors to evaluate how creditworthy a company is.
2. Internal Guidance
Through accurate and honest financial accounting, a business can meet all external legal requirements and optimise day-to-day operations. As mentioned, corporate accountants will rely on accurate and up-to-date financial data to project budgets and outline better business strategies.
3. It Aids Investors
When a lender determines whether or not to lend money to a company, they first perform a risk analysis that will review the financial accounting. This will give lenders an idea of all the business assets and debt, giving a clear indication of the company’s creditworthiness.
Why Is Corporate Accounting Important to Business?
Many businesses haven’t yet adopted corporate accounting as it isn’t a legal requirement, but this is a major oversight. Corporate accounting is hugely beneficial to business in a number of ways. Here’s how.
1. Analysing Your Audience
Corporate accountants can make for much more impactful marketing campaigns as they provide useful insight into the customer profile in terms of income level, academic background, lifestyle, and values. This can then be used to hone in on audience targeting with companies better prepared to allocate time and resources accurately.
2. Cost Analysis
A primary function of the corporate accountant is the creation of a budget to guide future spending. They will perform a thorough cost analysis of your company, explore avenues for future opportunities, and make a more profitable business model.
3. Determine a Budget
Using the statements from financial accounting, your corporate accountants can create more accurate budgets linked to your sales’ history and market information. The past business activities will then be able to define future business opportunities.
Accounting software for financial and corporate accounting will allow you to enjoy the benefits of financial compliance and business forecasting related to these two operations. Check with Omni Accounts about their industry-specific software that will meet your business needs.
Everything you Need to Know about Corporate Accounting
Accountants are accountants are accountants, right? Wrong! Within the field of accounting, there are two main divisions: corporate accounting and public accounting. Also known as bookkeeping, accounting involves the collection, analysis, classification, verification, interpretation, and finally the presentation of financial information. There are different types of accountants. Corporate accountants tend to manage the accounts and finances of one financial entity or business, making sure they comply with the various regulations and laws, while also monitoring key financial KPI’s (Key Performance Indicator) such as profit and cash flow. Public accountants sell accounting services such as auditing to other companies and perform services for many different firms. Today we will be exploring the world of corporate accounting.
Corporate accounting deals with processes such as the preparation of cash flow statements, financial records, company balance sheets, and more. A corporate accountant employed in industry (i.e. not by a large accounting firm) is typically focused on making sure the financial and operational activities of a company are correctly recorded, controlled & monitored and that management has the information necessary to make the best business decisions. Below we will discuss the main functions of corporate accounting within a business.
The Creation and Upkeep of Company Accounting System
Corporate accountants are tasked with creating, managing, and maintaining the corporate accounting system of a company. Today, this is likely to be via a software program, that may even span the entire firm, such as an ERP system (Enterprise Resource Planning) like Omni Accounts & ERP. The accounting department creates separate accounts to handle business elements such as assets, income, liabilities, and expenses. Having done so, they assign each account with general-ledger codes and set the overall system to record specific transactions into the matching accounts automatically. If the business has a more advanced ERP system, corporate accounting also involves the regular creation of a variety of reports that are used by management to assess the state of the company’s assets, liabilities, and cash flow. These reports are made using real-time data and information. These financial statements for the company are also produced for the purpose of auditing by regulatory bodies (and public accountants!).
Managing Accounts Receivable
The sector of corporate accounting also handles accounts receivables. This is the area of financial administration that deals with, and records, money coming into a company, typically from customers. This area of the business will also monitor which customer accounts are due for payment, and monitor the ageing on the accounts. They are also often responsible for collections and also managing default accounts (late payment). Sometimes they will work with a specialist agency to work on extremely late defaulted payments. This area of the business also feeds back to the management team about cashflow forecasts in terms of the timing of cash entering the business.
Managing Accounts Payable
Corporate accountants also deal with receiving and processing the invoices that come into the company for payment. The department then proceeds to make payments to contractors or suppliers according to the indicated means of compensation, as well as in agreement with the payment terms negotiated with the supplier. Examples of these include bank transfers, checks, and credit card payments. The payments can be of 2 main sorts: fixed and variable costs. Fixed costs and invoices generally relate to costs incurred every month regularly such as rent and utility bills. Variable costs would include things like raw materials, finished goods or one-off professional services.
Processing Employee Payroll
The calculation of staff salaries falls into the scope of corporate accounting, although some firms do outsource this payroll task. Corporate accountants calculate wages for staff according to various work periods. This can be weekly, bi-weekly or monthly. They also calculate any benefits, perks or other sundry items (such as expense refunds) that are due to the staff member, as well as calculate the taxation that needs to be deducted and submitted to the tax authority. Staff typically receive payroll direct deposits into their bank accounts on the agreed date.
Corporate accounting is highly necessary for any business. Not only does it ensure that money comes in and out of the business as and when it is due, but by recording the transactions, corporate accountants help to ensure that management is aware of the true state of their business’s liquidity and profitability. Corporate accountants also have a great responsibility to ensure that businesses stay compliant with local financial regulations. With such a great responsibility it is little wonder that software packages such as Omni Accounts are invaluable to this sector.
How to Prepare for a COVID-19 Black Friday in South Africa
Black Friday, like much of 2020, is sure to be a bit different this year. It is unlikely that the scores of crowds seen globally will be repeated this year with social distancing and contactless being the new buzzword of COVID-19. Many tout a massive move online globally this Black Friday as consumers become more anxious about bricks and mortar stores. Will South Africa follow suit? Below we explore some of the aspects to consider.
Northern versus Southern Hemisphere
While much of the Northern Hemisphere heads into autumn and winter- and is beginning to face off against COVID-19 in round 2 – retailers there must prepare for stricter government guidelines on retail, contact, and social engagement. Europe and the North have to a large extent enjoyed a relaxation of measures during the 2020 July-August summer and are now facing a bleaker pandemic festive season and peak shopping period. Deloitte recently released a prediction that globally festive sales would only increase 1-1.5% versus 4% last year. South Africa is in a slightly different situation. As we move out the first COVID peak and into summer many of the restrictions are now easing and consumers are heading out more confidently, albeit cautiously. While this caution, especially in higher income brackets with access to online payment channels, will no doubt lead to a continued trend towards online shopping portals, the relief of greater social freedom may see more consumers than the northern hemisphere, heading to the shops.
Access to eCommerce
Another aspect of the South African retail landscape that needs to be considered, is access to banking and technology across the population. While in the developed nations, there is far greater access to online technology, online payment systems, and the banking system- especially for lower-income consumers in SA, this is simply not the case. As much as an unbanked consumer may like to take up online offers over Black Friday, the lack of online banking empowerment and access to appropriate technology as well as potential literacy issues means that many consumers will simply not be able to access an online Black Friday portal. Retailers would do well to make sure their offers and shopping avenues (be it eCommerce or bricks and mortar offers) are correctly tailored and positioned for the right target audience.
COVID-19 Restrictions will continue
Despite some very large differences to the peak period forecasted for developed nations, South African retailers will still face government restriction and altered consumer behaviour over the last quarter of the year in 2020 and into the holiday season. Retailers will also need to be mindful of public perception, and so it will be vital to do and also to be seen as taking extra precautions over Black Friday, to bolster shopper confidence. Consumer sentiment will no doubt dictate that Black Friday will need to be more than one day, for example, in order to facilitate the necessary social distancing needs- or retailers run the risk of being branded negligent and greedy.
Online Retailers Should be Prepared to Scale-up
While South African eCommerce retailers may not capture as great a share of the market as developed nations- coronavirus has most certainly bolstered their sales! And Black Friday will be no different. The COVID-19 gains are likely to be cemented during the period, with a few differences. Unlike the COVID period where online retailers were forgiven for being caught on the backfoot, and delayed deliveries and lack of slots and slow site processing was accepted and tolerated- consumer sentiment is now that retailers have had time to get their act together! Ecommerce businesses need to work closely with courier companies to ensure capacity is bolstered in advance. Retailers should also consider techniques to spread demand. These could be in the form of incentivised slower shipping (offering a % discount in return for slower delivery), spreading the offers into a “Black November”, staggering offers throughout the month, and ensuring their online store is robust and able to cope seamlessly with the volumes. It is imperative for staff to be prepared and to communicate with customers timeously- be it on social media, for returns, complaints, or compliments!
Brick and Mortar Preparation
In the case of physical stores, it’s all about trust. In these tougher economic times, consumers will most certainly be driving a hard bargain in exchange for their cash. They will be picky about what they spend- and with who. For the brick and mortar stores, public relations will be key to enticing shoppers out. Almost as important as the discount, will be creating a safe environment in which shoppers can take advantage of Black Friday. Stores need to let customers know that customer safety comes ahead of profit! Those stores are seen to be flouting social distancing recommendations to make a quick buck, face an angry public backlash. Stores need to be creative in order to attract the business but be socially responsible. Again the idea of a “Black November”, as opposed to a single Black Friday, may help to spread the social contact, and staggering and targeting deals throughout the month makes sure the demand is spread. This allows consumers to pick their own Black Friday and help stores from getting overrun. Other ways of spreading demand include “pre-ordering” and pensioners afternoons to assist the vulnerable to take advantage of offers. Big firms are also lengthening their return windows to minimise valuable footfall in stores being occupied by returns processing- incentivising delayed returns opens up the store for more revenue.
Black Friday will be different this year in the shadow of COVID-19- of that, we can be sure. But in the cloud, there is room for opportunity when retailers, both online and on the ground, think differently and prepare. The 2020 holiday season shopping will still take place, and retailers can prepare and take advantage of it- safely.
Everything you need to know about becoming an Accountant in SA
The South African financial sector is in growing need of qualified accountants. Every company has a finance department, which means there is a huge demand for those skilled in accountancy.
What does a Professional Accountant do?
Accountants are tasked with giving clear records of financial transactions for either an individual or a business. The job can be quite demanding but can open you up to career opportunities within almost any industry. Tax season is generally the busiest time of year in accounting, and there is also the chance of assisting in examinations and audits of financial records. There is a lot of flexibility in the type of accounting you can do, from monitoring the books of private individuals to conducting financial studies for large-scale corporations.
Some typical accounting activities include:
What is SAIPA?
The South African Institute of Professional Accountants (SAIPA) represents all Professional Accountants practising in South Africa’s commerce, industry, academia and public sectors. Boasting a membership of more than 10 000 Professional Accountants, SAIPA contributes to the advancement of the local accountancy profession, influencing legislation and constantly transforming to keep abreast of business, financial and social developments in the country and internationally. SAIPA is a professional body registered with the South African Qualification Authority (SAQA) and has a number of registered professional designations.
What do I need to study to become an accountant?
At high school level, you will need to choose Mathematics (Not Maths Literacy) and Accounting (preferably), matriculating with marks that will ensure you get a university pass. This will lay the foundation in accountancy and financial knowledge, while also instilling the correct logic and process of thinking to succeed in the profession.
After matric, you will need to enrol in a tertiary institute and complete a Bachelor of Commerce degree – or equivalent qualification at a SAIPA-accredited institution. The core subjects you’ll be studying are:
Having successfully earned your Bachelor of Commerce degree, you will need to gain invaluable work experience in a three-year learnership at a SAIPA-Accredited Training Centres (ATC).
Professional Evaluation (PE) Exam:
Having completed your learnership, you can then tackle the final hurdle, which is the SAIPA PE exam. Trainees can take the exam, either in May or November, at various venues countrywide. This is a four-hour written competency exam that determines your ability to integrate academic knowledge with practical workplace experience.
What does a chartered accountant do?
Chartered Accountants (CA) are generally employed within the commerce, industrial or non-profit sector. A CA will undergo more training than an accountant including an academic post-graduate programme followed by at least three years under a mentorship. The work’s focus is generally the provision of accurate records of all financial transactions for an individual or business.
What is SAICA?
The South African Institute of Chartered Accountants (SAICA) is a professional accountancy body in South Africa with more than 36 000 members. SAICA provides support, advice and services to its CA members throughout their professional lives.
What do I need to study to become a CA?
Your high school subjects and undergraduate degree will follow the same lines as a Professional Accountant, however, you must ensure that the qualification is accredited by SAICA. You will then need to complete a Certificate in the Theory of Accounting (CTA) or equivalent qualification which is a post-graduate course focusing on Accounting, Auditing, Taxation and Financial Management. As with a PA, a CA must complete a three-year learnership programme at a SAICA-registered training office. During this time, you will be studying towards your Certificate in the Theory of Accounting (CTA) which you’ll need to pass before going onto the next step. The CTA is valid for three years.
If you’ve passed matric with pure maths and will be studying part-time, you can enter into a training contract with a SAICA-registered training office. During these 5 years, you will study towards your CTA or equivalent.
Pass the exams:
- After this, you will need to pass two SAICA professional exams, the first of which is the Initial Test of Competence (ITC) written in January or June every year.
- After passing the ITC, 20 months of registered training with a SAICA-accredited training office, and completion of the professional programme, you qualify to write the Assessment of Professional Competence (APC).
On successful completion of this, you can register as a CA(SA) with SAICA.
What are some of the benefits of an accounting career?
As mentioned, accountancy skills are in big demand countrywide, which is why choosing a profession in accounting is a sound choice. But here are some more benefits to consider:
- Solid skills’ base
The practical skills and financial knowledge learnt when studying a career in accounting are beneficial across various industries. You also have a clear career path and understanding of where your career is heading.
- Job stability
As the saying goes, there are only two certainties in life: death and taxes – which is why almost every business requires an accountant. It’s a stable job choice with good prospects.
- Career growth
Although you will start at the bottom rung, with accountancy you can quickly work your way up the ladder. There’s no limit to career success, you just need to decide how far you want to take it.
- Financial security
Depending on which career path you choose, there are benefits associated with the company that hires you. Additionally, an entry-level accountant will earn roughly R285 000 per year with an entry-level CA earning R406 000.
- Workplace flexibility
Because of the need for accountants everywhere, you can choose where you want to be based. Anywhere from the coast or mountains to city living – you decide! There are different career paths to choose from, including financial and corporate accounting.
If you have a proficiency in accounting and a passion for numbers, then pursuing a career in accounting is a really worthwhile consideration. It opens the doors for international job opportunities and the chance to work in whichever industry you prefer.
Three Pillars of Building a Successful Team
Employee motivation and employee engagement are terms used liberally in HR and team building sales pitches- but do they really affect your bottom line? Are there real benefits for your business or is this just another marketing gimmick? Ovidiu-Iliuta Dobre (2013) writes that “there is a positive relationship between employee motivation and organisational effectiveness, reflected in numerous studies.” Employee satisfaction, motivation, and engagement are directly linked to how effective and efficient your business is. And a more effective and efficient business means a more successful business. Below we will take a look at 3 techniques to foster motivation in your team and set the foundation for a successful team.
Investing in your employees is critical to their sense of self-worth, as well as their technical skills. Investing in your team takes two forms. Firstly it is the technical aspect of the job, where additional mentorship or formal training can be a real benefit for their productivity. Helping employees to upskill, not only makes them better technicians at their roles but also gives them a sense of the company giving back to them and investing in them in ways other than their monthly salary.
The second aspect of employee investment is managerial mentorship and guidance. It is managers’ responsibility as leaders to guide their employees through both the ups and downs of their professional growth journeys. This takes the form of being actively engaged and receiving and giving open feedback at meetings as well as on the job.
Telling your employees when they have done good work or made significant improvement has an enormous impact on employee engagement. It is equally important to feedback when the job has had gaps or errors. Giving open, supportive, and constructive feedback to your employees when something has gone wrong is just important to their sense of wellbeing in the workplace. It is important for them to trust that while you won’t let poor performance slide, you will be fair and constructive, and allow them to learn positively from their mistakes. According to neuroscientist Paul Zak, a 10% increase in employee trust in leadership can have the same impact as a 36% increase in salary- the numbers are undeniable!
A lot of business leaders are reluctant to reveal anything to their teams. Managers often shy away from revealing planned changes, business, and market challenges, and even project costs. However, studies have shown that increased transparency often leads to stronger teamwork and focus. Management should commit to being open to responsibly answering questions, even the uncomfortable ones, no matter the seniority of the team member inquiring. When teams understand what is happening and why it is happening, there is a greater level of ownership and respect from them, and this has been shown to directly impact their level of engagement.
Give your Team Autonomy
People very often behave the way you treat them. If a manager micromanages and does not delegate effectively, employees often do not feel respected or trusted- and motivation and engagement fall, along with their output. It becomes a self-fulfilling prophecy. As Ruth Mayhew writes “with constant oversight comes disengagement from the job itself; the employee’s job is no longer challenging or fulfilling. Employee disengagement manifests itself in a number of ways, including poor performance, reduced productivity, and low employee morale.”
When the scope is clearly defined and management is actively supportive, delegating can empower employees at all levels. Allowing employees to run their own projects, and to monitor and only step in to correct errors, or to add direction when the employee’s trajectory may cause material damage to the project, enables employees to feel ownership, learn from their mistakes, and empowers them. This sense of autonomy is shown to add to job satisfaction which in turn leads to a better outcome for your business.
Building employee engagement and motivation is about much more than bringing in cake on your birthday and funding a wild year-end office party. It is something that must be part of the company and management culture, a way of doing business, and not 3 isolated events in the year. Building a team that feels valued and respected requires work each and every day. And in turn, the payoff will be staff engagement and enthusiasm that will result in day to day increased output and quality performance. You get out what you put in, and people and employees are no different. Getting the ideal performance out of your staff is about much more than a fair salary, and the studies and literature support this premise completely. When people are genuinely respected, they want to contribute and want to be part of leading their company to success.
COVID-19 and 4IR in South Africa
In recent times there had been a lot of talk around the Fourth Industrial Revolution (4IR) in South Africa. It was widely accepted that we needed to be prepared for this change to the economy and people’s livelihoods. The government advised that 4IR would bring a positive transformation to the beleaguered South African economy. With the concern about the loss of jobs, it was understood that the education system in South Africa needs to change in order to prepare young people to have the skills necessary to find employment in the future. Additionally, the communication infrastructure needed to be upgraded to enable this technology.
In March 2020, South Africa, like most of the world, started the measures against the COVID-19 pandemic This changed life for everyone. Due to the lockdown measures businesses closed and people stayed at home, only leaving to shop for essential food items. Suddenly, many of the aspects of 4IR became crucial to everyday life. As a tech analyst, Arthur Goldstuck stated, “it is clear that the coronavirus crisis will have at least one positive outcome. It will provide a dramatic, global and unavoidable case study of the fourth industrial revolution in action”.
There are numerous technologies underlying 4IR. Some of these include cloud computing, artificial intelligence (AI), the Internet of Things (IoT), 3D printing, Blockchain, Big Data, drones, robotics, biotechnology, Cryptocurrency, and digital communications. Many of these technologies were already in use but the pandemic has dramatically increased the numbers of businesses using them, not out of choice but out of necessity. The technology offers methods of working and living while observing social distancing. What has happened, is that many businesses have seen many advantages in some of the new ways of operating and intend to use them going forward.
Suddenly the idea of working from home became not something that would be viewed with suspicion by employers, but a necessity. Many businesses have been forced into embracing this mode of working or face closing their doors permanently. Obviously, not all staff are able to work from home, particularly those involving manual labour such as the agricultural, building, and manufacturing sectors. However, many businesses have found that having staff working remotely is not such an impossible task and has helped to keep the wheels turning until lockdown eases.
Business meetings, conferences, training, in fact, any face to face exchanges, have been replaced by online video meetings. People who had never used online video software are now doing so in order to connect to work colleagues as well as family and friends. There are many apps that enable teams to chat and communicate. Companies who were reluctant to use online meetings have suddenly realised the very substantial cost savings, in time, accommodation and travelling expenses to be gained.
eCommerce has really shown its value. The ability to purchase online and have goods delivered has proved invaluable to enable social distancing. The demand in South Africa initially exceeded the capability and resources of companies offering this service. Many larger retail organisations have scrambled to improve and upgrade their eCommerce platforms as well as improve their delivery services. It is likely that many consumers will continue to use online shopping even after lockdown, as they have experienced its convenience, as well as the fact that the threat of COVID-19 will still be around for months to come. Many businesses that did not trade online have now found a way to be able to trade online and thus continued to serve their customers.
With schools and universities being closed, many students and learners have been forced to turn to online lessons in order to keep their studies up to date. The loss of a whole academic year is unthinkable so teachers and students have learned to use online teaching methods to keep studies up to date. Unfortunately, many students have been unable to access any form of online teaching and many schools are unable to provide the function. Sadly, access to online teaching methods is often available only to the more affluent sections of the population and not to the people who desperately need it.
There has been an increase in the use of 4IR technologies in health care, specifically around COVID-19. 3D printing has been used by the University of Johannesburg to produce reusable surgical face shields to satisfy the increasing requirement for personal protective equipment for healthcare workers. Similarly, an AI programme has been developed that predicts with up to 80% accuracy which coronavirus patients will develop acute respiratory disease. Drones are being used to deliver medical supplies and robots to do deep cleansing. There are many examples of AI being utilised in the race to understand the virus and to find treatments and a vaccine.
The pandemic has highlighted more than ever the deep inequalities in South Africa. Poor or non-existent physical infrastructure, not just in the rural areas but in suburbs around metropolitan areas make access to the Internet, difficult if not impossible. This results in employees who are willing to work from home being unable to do so, due to the lack of physical infrastructure in the area in which they live.
The high cost of data puts the ability to get online out of reach of a large section of the population. Many students and learners simply cannot afford the hardware or the cost to connect to the internet and so cannot use any online learning facilities.
South Africa already had a large unskilled labour force and massive unemployment. With the effects of the coronavirus epidemic, this situation has become even worse. Jobs are being lost due to the economic fallout from the lockdown measures used to control the pandemic. These measures are being implemented not only locally but globally and are having disastrous effects on current and future jobs in all sectors of the economy. The workers affected will generally find it extremely difficult to find new employment.
It has become very apparent that unless there is a huge investment in improving both the physical infrastructure and education then the benefits and advances made by the Fourth Industrial Revolution cannot be successfully implemented in South Africa.
4 Tips To Manage Business Finances Weekly
For business owners and managers, accounting tasks are not always a favourite when other items on their to-do list seem far more pressing! That is until the long-overdue financials rear their ugly head and the administrative catch-up task leaves you wanting to pull your hair out. Maintaining your business’s (or even home financials) on a weekly basis goes a long way to ensure that your bookkeeping is kept up-to-date and is a major component in avoiding the month-end (or year-end) headache! Below we talk about 4 simple tasks to do weekly that will take the sting out of your financial administration.
Start the week with a quick cash flow forecast
Start your week with a quick look at your ageing accounts payable and receivable. This will go a long way in helping you have a snapshot of the cash flow picture of the coming week. If you notice any issues you can be proactive and push for prompt debtor payment or ask for a small delay on accounts payable items. It really helps to be prepared instead of being on the back foot and getting an unwelcome surprise in the middle of the week.
Keep a paper or digital trail
We’ve all heard the old adage “the devil is in the detail” and in the case of a paper trail in accounts, this holds especially true! It is even more important in the case of a small business, where there is no dedicated accounts department, to keep track of expenses, receipts, and invoices regularly. Whether it be office stationery, raw materials, or postage costs-by keeping all the receipts and documentation, or simply taking a picture of it with your smart device, you have a clear record for the end of the week to reconcile and record your business costs that week.
Invoice your clients
In a Forbes article, John Rampton, founder of online payments company Due, said, “We’ve actually found that when you invoice the same day that the job is completed (as opposed to waiting two-plus weeks for your billing cycle) you are almost 1.5 [times] more likely to get paid.” If you don’t invoice, you don’t get paid! Delaying your invoice leads to delays in your cash flow and also does not give your customer a great impression. A prompt invoice shows a business on top and in charge of its affairs. What’s more, invoicing your client promptly for the products or services you provided while it is still fresh in their mind means that if there are any discrepancies or queries regarding the invoice, they can be discussed promptly and not a month (or more!) after the fact.
Reconcile before the weekend
Don’t procrastinate. Now that the week is done and you have kept track of your expenses and sent out your invoices, it is the ideal time to do one last weekly step before you head off for your weekend.
Reconcile. Your business transactions of the week need to be reconciled with the movements of your bank account, and this is usually done via an automatic import of your weekly bank statement into whatever accounting software you are using. This simple step of reconciling a handful of transactions in and out of your account weekly, versus trying to deal with a whole myriad of them at the end of the month is not to be underestimated!
Keeping your business accounts squeaky clean and up-to-date needn’t be a monthly laborious task. By using some of these simple steps, you can save yourself the stress of the “last-minute dash” to month-end, and make keeping your accounts accurate and current, far less of an administrative headache.
Ways to manage your small business more effectively and efficiently
Small businesses are a vital contributor to the local economy but mismanagement can quickly lead to unforeseen failings. In these tough economic conditions, small business management is the key to business survival.
Business accounting tips for small business
With the global pandemic, where precautionary lockdown measures compel most of the population to stay home and business can’t operate, as usual, small businesses need to ensure effective management in all areas for maximum operational efficiency. One of the key areas of management in ensuring all business accounting is performed well. For those getting started, here is a look at some basic business accounting tips.
1. Set up a bank account
It might seem obvious, but many try to operate businesses using personal accounts. It’s important to open a separate business bank account to keep records distinct from personal expenses. This makes small business accounting much easier during tax season as well.
2. Expense management
Small business accounting relies on effective expense tracking, which means keeping financial statements, tracking deductible expenses, and preparing tax returns. When it comes to business expenses, it’s important to keep all receipts, including:
- Travel expenses – where, when, and why you travel by recording in a logbook.
- Entertainment and food – if you’re having a business meeting at a restaurant, then the receipt can be retained.
- Car expenses – repairs and maintenance for cars used for business must be tracked.
- Incentive and marketing – any items purchased as business gifts or that market the business must be recorded.
- Business from home – for those working from home, aspects such as rental/bond payment, WiFi and electricity need to be considered as a percentage that can be claimed back for business operations.
3. Monitor income and expenses
In addition to keeping receipts, small business owners will have to keep a record of all business incomes and expenses on a daily basis. All transactions will need to be categorised and then reconciled with receipts and bank statements.
4. Establish a payroll system
For small business owners who have to hire assistance from time to time or a small staff, a payroll system will need to be set up to ensure all payments are made timeously and relevant tax contributions are submitted.
5. Decide on the payment method
The drive of business is to generate an income, so small business owners will need to establish how that revenue will come in. The most common method is EFT payments, but business owners will need to establish what works best, as well as whether deposits and late charges are needed.
6. Get on top of tax returns
Consult with an accounting professional on what your business status is and exactly what tax returns you will need to submit throughout the year. Ensure you know the tax deadlines as you can incur SARS penalties if you don’t comply.
Digital solutions for small business management
There is a lot to monitor and manage when it comes to small businesses, but there are many digital platforms and innovative software packages that are now making small business management and accounting that much easier. Here are some of the digital solutions available.
1. HR software solutions
The automation of human resource (HR) management has drastically minimised the amount of administration performed by small business owners. There is now no need to outsource the task or hire a person specifically for this role; modern software solutions will perform the HR tasks efficiently, eliminating errors and saving on costs. Value-adding aspects such as employee performance can be tracked, and opportunities for growth and development identified.
2. Accounting software
Depending on the needs and type of small business, there is an accounting software solution available. Business owners can either invest in the most basic bookkeeping software, or they can invest in scalable accounting software that can perform more specific functions as the company grows. The basic computerised accounting solutions will manage the company’s books, monitoring basic income and expenses including accounts payable and receivable, sales and purchase orders, and the general ledger. Accounting software can effectively give an overview of the company’s financial viability by determining profit, loss, and asset status.
3. Tax accounting software
Further to the basic accounting software, small businesses can also invest in tax accounting software which has useful features such as deductible expense tracking and e-filing to allow for easy returns of tax information. A massive benefit of tax accounting software is the minimising of calculation errors and preparation for the financial year-end.
4. Data collection
A modern solution to small business management is the analysis of customer data to discover exactly what customers want and do not want. This form of Business Intelligence helps business owners to streamline operations by tracking, gathering, and analysing relevant data.
5. Digital logbook
Monitoring automobile expenses can be quite a tough task. Business owners and employees need to keep a record of kilometres travelled for work reasons so as to work out petrol, as well as wear-and-tear costs. Fortunately, there are now electronic logbooks that assist in monitoring these aspects of small business travel effectively. Unlike manual logbooks, there is less margin for error.
6. Payroll software
Another aspect of small business management that has moved to the digital platform is payroll. Innovative payroll software offers business owners a number of key features including time recording, payroll reporting, storage of personnel records, and planning for future costs.
7. Business oversight
As a business grows, business owners run the risk of losing a grip on the ins and outs of the various business activities and transactions, which is where errors can be made. There are many apps available that empower small business owners with valuable financial oversight at any time, via computer, tablet, or even mobile phone. This also means that, no matter what the situation, business owners are able to keep on top of all business operations.
There are so many modern tools to assist owners of small to medium-sized enterprises in the effective and efficient running of day-to-day operations. This takes away the administrative hassle of business ownership while also ensuring that all processes are within regulation and timeously implemented. Business owners should thoroughly research the various small business management and accounting tools available, and partner with reputable suppliers to ensure they are investing in the best possible tools for their particular business needs.
Omni Accounts – Surviving Lockdown
Like many countries, South Africa went into lockdown due to the COVID-19 pandemic on the 27th March 2020. Here is a brief description of how Omni Accounts has been surviving the lockdown period.
The Challenges and the Plans
Fortunately, most of our employees have been able to work from home. However, our biggest problem was that we were not able to set up our switchboard to divert to mobile phones. This was a problem in that our customers were not able to call us for support.
The Whole Omni Team
- Connectivity. Not everyone has a good stable internet connection. Some of the team have a fibre connection which works well. Others are on 3G/4G connections, which have been prone to speed issues and disconnections. It is clear that in South Africa we do not have the infrastructure to deal with lots of people working from home.
- Family. Some of the team have small children at home or older children needing assistance with lessons. Spouses can be a problem too; we have one who chews up bandwidth on YouTube. There can be issues with both parents trying to work from home and conflict over childcare, internet, household chores, etc. Space can be an issue, with problems over a quiet place and desk. There is also the change of work environment and challenges of working from home. It is also a challenge for management, to have everyone working from home, but we put our trust in our staff and we have not been disappointed.
Omni Support Team
- Phones. Here we managed to make a plan. We have a couple of mobile numbers which we divert in rotation to different support consultants each day. This works reasonably well but it’s far from perfect.
- Time. We have definitely seen a drop in demand for support, with many businesses being closed and unable to work from home. We have made things a little easier for our support team by reducing the working hours from 09h00 to 15h30. This is a temporary measure and will be adjusted as circumstances change.
- Remote Support. We use TeamViewer to do remote support on our customer’s computers. This has voice capability so the support consultant can talk to the customer. We also use Zoom at times from training.
- Teamwork. Each morning all the support team connect up in a Zoom meeting. This really helps to keep everyone connected and all on the same page. We also use WhatsApp groups to stay connected during the day.
- Website Chat. We have been supporting customers via the chat function on our website.
Omni Sales Team
- Contacting Customers. Many businesses have been unable to work or if they are working remotely, then their contact details were not provided.
- Demos. Our sales team has been kept busy with Zoom demonstrations. We have found many businesses have been using this time to do some research on better ERP solutions or looking at efficiency improvements of their current solution.
- Training. We have used this time to upskill our sales team in terms of product knowledge and also providing demonstrations. This has proved extremely valuable. With an online demo, we are now able to have multiple people sitting in on the demo and learning from the process.
- Reduced Sales. Understandably, our sales revenue has dropped. This is to be expected as businesses try to conserve their cash and reduce expenses. We have found that our new software rental scheme is popular as there is no initial outlay of capital.
Omni Admin Team
- Phones. Here too, due to our switchboard issues, we have provided staff with pay-as-you-go sim cards so the staff can call without disclosing their personal mobile numbers.
- Work as Usual. For the most part, it has been “work as usual”. Our core team are our unsung heroes holding the fort in the background and keeping things up to date and ticking along. We have had to put a couple of people on ‘extraordinary’ leave, as unfortunately, the nature of their work has meant they could not work remotely.
Omni Development Team
- Work as Usual. Our developers work remotely most of the time as a rule. So in this case, nothing much has changed in this section.
- TERS/UIF – We have applied for some assistance from this fund. Our salary bill is our biggest expense.
- Suppliers – Some of our suppliers have been generous in offering reduced SLA charges for a month or so. One of our landlords has also agreed to a reduced rental. We greatly appreciate this assistance.
- Our Team – We are extremely grateful to all our employees during this time. They have pulled out all the stops and have really adjusted to the situation and found new ways of getting the job done. We could not have survived without their commitment and loyalty. We are proud of our whole team and we have continued to be available for our customers.
Many businesses will be facing much the same challenges as us. This whole crisis has made us rethink how we go about doing business and how things we thought were impossible are actually possible if there is no other option. We would love to hear from other businesses on their experience.
What are Barcodes used for?
Barcodes are used in hundreds of different areas of modern life. Their ability to improve efficiency and reduce errors means their use improves cost-efficiency. Additionally, barcode labels are fairly inexpensive to produce so it is not surprising that increasingly barcodes are finding their way into many aspects of everyday life. Below are a few examples of the way in which barcodes are being used.
Almost all products now have a barcode that allows them to be tracked. This can range from just a simple stock code to more detailed information regarding shelf life and warranties. Barcodes on food products can now be scanned using a mobile app that provides detailed information on ingredients and nutritional value.
Barcodes have enabled huge companies such as Walmart and Amazon to streamline all aspects of their business from managing their supply chain through to sophisticated tracking of the delivery of goods to their customers.
Entertainment and Travel
Barcodes are now used on tickets to many entertainment events, such as cinemas or shows. The barcode is scanned which checks the validity of the ticket. Barcodes are used extensively by airlines on air tickets and boarding passes. Often boarding passes containing a barcode can be printed by the customer themselves, reducing costs to the airlines.
QR Codes at bus stops and railway stations can be used to provide up to date information about time tables and connections.
Many adverts in a large variety of media now contain a barcode in the form of a QR Code (a 2D barcode). The QR code can be scanned, typically by a mobile device, to provide more detailed information about the product or service being advertised. QR Codes can be used to also link to videos that provide marketing or technical information. They are often used to link customers to a film trailer. Some businesses use them on business cards which, when scanned on a mobile device, takes the person directly to the company website.
QR Codes on For Sale signs provide contact details for the agent as well as a link to more information on property for sale.
There are mobile apps that allow you to scan the barcode on the food you eat and the app will then use the information to track your food intake, thus providing a food diary.
In hospitals, barcodes control the inventory of medication and equipment as allowing access to patients and their families. The margin of error is greatly reduced and information is updated accessed quickly.
In certain countries, a unique national timber-tracking system has been implemented which means that every legally harvestable tree and every cut log carries a barcode. This means that it can then be tracked from its source to its final destination. End users can then be assured that the timber they buy is legally from a sustainable source.
Recycle Bins have been barcoded providing the ability to provide incentive-based recycling.
Barcodes on clothing tags can provide information on the material used, country of origin, and sustainable manufacturing processes.
Barcodes may well be a real help when used in the ongoing effort to ensure products are sustainably manufactured.
Libraries have used QR codes for quite a long time. However, in Austria, a city has built a public library with nothing but QR codes, NFC and stickers.
QR Codes next to paintings or sculptures in museums and galleries will provide information about the actual items being exhibited.
At the bottom of magazine articles leading the reader to more information on the subject.
Schools and universities use barcodes to control assets as well and
In certain countries such as China and India, QR codes are used to facilitate payments. The codes are used to store credit card or bank account information. Cryptocurrencies such as Bitcoin use QR codes to store transaction information, payment addresses, and cryptographic keys to share with digital wallets and support payments.
Payment options such as Zapper use QR codes to facilitate the payment process. ERP software can embed QR Codes in invoices and quotes thereby providing easy options for payment.
QR Codes can be used to provide discount vouchers or special offers.
Just from the few examples provided above, it is obvious that the use of barcodes is widespread. With the rapid increase in technology and the advent of IoT (Internet of Things), their use will continue to increase.
Benefits of Computerised Accounting Software versus a Manual Accounting System
Keeping track of a business’s finances and accounting transactions is an extremely important task. It is a task, however, that can be quite arduous and time-consuming. The introduction of computerised accounting software that automates and digitalises many of the accounting functions has proved revolutionary to this business function. Below we will discuss the specific benefits that can be achieved when migrating from a manual accounting process to an automated computerised accounting software program.
Manual accounting processes use paper systems (or perhaps rudimentary spreadsheet systems) and ledgers to record and process all their accounting transactions. The very basis of the accounting equation dictates that any transaction that is entered must be entered in at least 2 different accounts, if not more. The double entry system in accounts means additional work for a manual system where any transaction must be entered more than once in multiple places in the manual system. In the case of a computerised or automated accounting program, this entry is only needed once, as the correct corresponding ledgers and accounts are adjusted and updated automatically. Invoices, receipts, and other accounting documentation can also be stored digitally, saving time on manual filing exercises as well as the time when searching for specific information again.
An automated accounting software program goes a long way in mitigating human error. Because of the reduction of manual processes, there is a much smaller window of opportunity for human error to creep in. While the old saying goes ‘garbage in – garbage out’- and automated accounting programs are not immune to this should there be a data input error- the sheer number of times information is entered into a manual system, interpreted manually and manipulated manually means that the opportunity for human error is just so much greater in a manual accounting system. Be it incorrect figures, badly written text, or calculation errors, there is a much greater chance of inaccuracy in a manual versus an automated accounting software program.
Greater Visibility and Control
Accounting or bookkeeping by its very nature involves a lot of capturing and storing of documents. From invoices, receipts, bank statements, and delivery notes- these all need to be captured, filed, and stored. In a manual system, this can be unwieldy and prone to error. When working on an automated accounting software system, it is much easier to pull up transactions, the associated documents, and any actions pending against them. It is also much easier run instant reports showing all transactions that have actions outstanding or due to them- this, in turn, gives far greater visibility into the state of the accounts at any one point in time and also gives business managers and financial managers much greater control over their accounts.
Manual accounting systems are much more vulnerable to security breaches. Often information kept and generated in such systems is sensitive (e.g. profit statements, payroll figures, or key customer information). Accounting software programs allow for specific user security levels so that sensitive information or reports can only be accessed with the appropriate seniority levels.
Faster, More Accurate, and Flexible Reporting
When reporting enters the equation, Accounting Software really shows its advantages over a manual accounting process. In the case of manual systems, not only do you have to capture all the data manually, but you also have to run and calculate the reports manually. Setting up any new kind of report is laborious and time-consuming – not to mention the additional room for error. Accounting software systems, and especially systems like Omni Accounts with its Report Writer function, make reports available at almost the touch of a button. Ageing reports, trial balances, income statements, accounts receivable, revenue by customer…the list goes on. All these reports are available in real-time, always updated with the latest information in the system. In the case of flexible report writing, you can arrange reports as you wish and can manipulate your data as you wish to show you the information you need. Such flexibility is simply not possible in a manual system.
As is required by law, companies need to have their annual financials audited annually. In a manual accounting process, simply finding a simple transaction can be a drawn-out process. In an accounting software program, it is far easier for auditors to find the information they need. This is helpful as it minimised inconvenience to you as the client- indeed the auditors may be able to spend very little time on-site which will minimise the impact on the daily operations of your business. Also the faster the auditor is able to move through your case, the less money it will cost you in audit fees.
There is very little benefit in staying in a manual accounting process. One barrier to entry may be start-up costs, but these costs will soon be offset by the multiple benefits of moving to an automated accounting software program. Manual processes can become somewhat of a dead-end, as they grow more and more cumbersome as a business develops. A computerised system, such as Omni Accounts can grow together with your business.
Omni Accounts Help and Support
In a day and age where technology affects every aspect of the way companies do business and how people interact with each other, the common lament is that of a lack of person to person communications and of going around in circles trying to obtain assistance or information.
The idea of a Call Centre strikes horror in many peoples’ hearts with stories of people are being left on hold for hours while they wait for technical assistance, being transferred from one department to another, charged astronomical rates for basic services, and encountering highly impersonal, ‘cut-and-paste’ responses which don’t really address the concern raised.
At Omni Accounts, we see and hear this feedback on a daily basis as more and more customers turn to us for a solution, and we are constantly striving to be the breath of fresh air that people are so desperately looking for. We are grateful to our +37,000 strong user base who have put their trust in our software and team. We believe that this is reflected in the commitment that we have to ensure that our highly trained and skilled Support Team provides world-class assistance to our customers.
What Makes our Support Centre Different?
We believe our cutting edge Accounting and Enterprise Resource Planning (ERP) software is both intuitive and easy to use, requiring minimal support. However, we do realise that all businesses are unique and that there will always be a need for comprehensive and professional support. We also believe that often nothing replaces the personal touch that only interact with real, live people will bring. After all, not everyone is tech-savvy or that sometimes the query simply cannot be answered by Help Files or FAQ’s.
Omni Accounts is proud to have a fantastic, committed Support Team who not only have in-depth knowledge and experience with Omni Accounts & ERP software but also have experience in dealing with a wide range of business types and how to configure the software accordingly. The Support Team also have IT-related skills, as well as accounting knowledge, and all of this, is a unique combination.
Support is given via email or telephone. There is also the option of remote support where the Support Consultant can log into the customer’s computer and help as if they are sitting right next to the customer. Our Support Team are viewed as an essential core part of the company and are highly skilled and remunerated accordingly. We, therefore, have different support options for customers to choose from, depending on their requirements.
Omni Accounts makes sure that their Support Team are always ‘on the ball’. Once our customers have purchased and registered their software, they will receive a unique customer ID number, much like an account number. All the customer details are stored in a central database. This number is requested when the Support Team are contacted. The Support Consultant can also search for the information using other information such as the company name or email address, but using the Customer ID makes the process much faster. Each time the customer contacts the Support Team, an Incident Number is given to the query, and all communications, written or verbal are logged against the Incident. This means that the Support Consultant has access to all current and historical conversations and queries. This results in the Support Consultant not only being able to assist with the query but also notice any recurring patterns within the customer’s company. It also allows for any member of Support Team our team to assist with the matter on hand as everybody has access to the same information on the account, largely negating the need to give the rundown to a new person as each Support Consultant has immediate access to all of the relevant information.
From time to time, one of our Omni Support Consultants will encounter ‘unchartered waters’. In this situation the Incident is escalated to the management team, who then assist to tackle the problem on hand with perseverance and enthusiasm, ensuring that the outcome and solution are conveyed to the customer in an intelligible and timeous fashion. In short, the Omni Accounts Support Team are constantly sharpening their skill sets and growing their knowledge bases and then sharing new-found information with the rest of the team so that everybody is brought up to speed, upskilled and ready for the next interesting encounter.
Our Support Team are also involved in testing the software before each new release, usually once a year. This means that they really know the product inside out. We have found that the combination of software testing, real-life scenarios, and frequent in-house training of the Omni Accounts team makes our Support Consultants well rounded in their knowledge and multi-skilled.
The Personal Touch
In today’s highly competitive business environment we firmly believe that now more than ever, it is vital that we maintain the healthy and good relationships that we have built up over the years with our valued customer base. We continually emphasize that our customers must be treated with respect and friendliness. We are extremely proud of our product but we also strive to be seen as a company with a heart and passion for customer satisfaction and we try to ensure that this is reflected by every member of our organisation.
“Customer service shouldn’t just be a department, it should be the entire company.” – Tony Hsieh
What to expect from the future of accounting in South Africa
Rapid changes in technology mean traditional professions will need drastic evolution to remain relevant or become obsolete. The future of accounting in South Africa will involve adaptation while retaining core aspects.
Accountants in demand
While Information Technology (IT)-related positions are some of the most desperately needed placements within South Africa, accounting is a strong second. According to the South African Institute of Chartered Accountants (SAICA), South Africa is in need of some 22 000 qualified accountants countrywide, with a particular need for specialised accountants, including Chartered Accountants. The biggest barriers are education-related, with many potential candidates failing to pass the exams.
Types of accounting jobs
There are many different types of jobs that fall under the accounting banner. These include:
- Auditor: this person will analyse a company’s financial statements to ensure accuracy and compliance with legislation. Financial statements reviewed include those related to business assets, bank balances and ledgers.
- Budget analyst: clients need assistance in creating and implementing a business budget. An analyst will have a clear understanding of the business environment to make decisions based on current and potential earnings.
- Forensic accountant: these are accountants who investigate the biggest financial discrepancies such as fraud and industrial espionage.
- Staff accountant: this individual works for any organisation preparing taxes, reports, and financial statements. Other duties could include bookkeeping, budget evaluation, and general accounts.
- Tax accountant: these accountants will keep updated on national legislation and regulations related to tax.
Changes in the future of accounting
The socio-economic, environmental, and technological advances being made globally are resulting in massive changes across every industry. New jobs are being created while more established roles are quickly being replaced. Here’s a look at what changes are set to take place in the accounting profession within South Africa over the next few years.
Achieving gender equality in accounting
In many respects, South Africa is fast addressing the gender gap. Our current cabinet is only one of 11 worldwide with an equal representation of men and women. However, as is evidenced by our horrendous femicide rates, there is still a lot that needs to be done in terms of female empowerment. In accounting, it’s anticipated that the profession – still undeniably dominated by men, particularly in leadership roles – will begin to bridge the gap as more women rise in ranks. As with Iceland, a country that made it illegal for men to earn more than women for the same role, South Africa will seek to address issues of equal pay, opportunity, and treatment.
Enhanced technological capabilities in accounting
There will be an increasing adoption of smart technologies such as dedicated accounting software which will provide superior accounting services and push the trend of outsourcing accounting services. The increased use of social media and communicative technology will improve collaboration, engagement, and disclosure with stakeholders and other affected parties.
Use of Artificial Intelligence (AI) in accounting
The aforementioned adoption of superior technologies – including AI, blockchain, and the Internet of Things (IoT) – will disrupt classical accounting. Rather than focusing on manual transactions, number crunching, and report compilation, accountants will be free to focus on business enhancement initiatives, risk management, and the development of sustainable business models.
More regulations for accounting
The advancement of technologies within accounting will also call for more regulations to ensure data protection. With regards to AI, accounting firms will want to understand the impact of data on AI decision-making, ethical behaviour, and the quality of financial assumptions. Accounting standards’ regulators will need to ensure standards are maintained when looking at human- and machine-integrated accounting.
Increased globalisation of accounting
Globalisation encourages the free flow of money between markets, transferring skills and outsourcing while also seeking to resolve threats related to local regulations. Despite Brexit and the US’ isolation-focused policies, globalisation will continue with accountants seeking ways to work inter-continentally.
Development of new accounting curricula
The aforementioned globalisation, technological advancements, evolving tax regulations, and associated adaptations to the accounting profession demands a change in the education of both incoming and existing accountants in line with future digital technologies. At present, few universities are developing transformative curricula to meet these demands but this will change. Accounting firms are actually seeking to partner with universities and colleges to bridge the gap between learnt knowledge and practical knowledge in the workplace. Accountants can expect courses focusing on digital technology, integrated report, and carbon emission accounting, among others.
More need for advanced education requirements
Beyond the skills development in terms of the changing accounting profession, there is going to be a need for more advanced skills in terms of accounting to meet growing demand. Where AI is able to perform the more manual accounting tasks, there will be a push for accountants to pursue master’s degrees while working.
Need to specialise in accounting
Connected with further education training is the need for accountants to specialise in niche accounting markets, rather than the general overview of accounting skills. The advancement of technology means that accounting firms of all sizes have access to the same tools which is leading to a rise in these niche markets. Some examples of specialised markets include carbon emission accounting and healthcare accounting, among others.
The basics in accounting will remain
While change is inevitable within the accounting profession, and technology will assist greatly, computers are not perfect and humans will still be required to perform basic accounting to ensure everything is run correctly. There will still be anomalies and discrepancies that individual accountants will have to analyse and correct, as well as going through business processes with company leaders to overcome any challenges.
Where traditional accounting was once perceived as people surrounded by stacks of paper-filled filing cabinets, sitting with calculators in basements trying to balance amounts, this is no more. The increase in digital technologies, accounting software, AI and other related advancements will see the duties of the accountant change, while the core function of the accountant remains the same. Accountants will just need to make better use of interpersonal and analytical skills to work with automated technology.
Tips for preparing for Financial Year End
Financial Year End (also known as fiscal year-end or FYE) is the closing off of a company’s accounts for their business year. At its core, it is nothing more than the 12-month (annual) accounting period for a company and is used to assess the annual profit, loss, and performance of a company’s finances. The financial year-end is legally important however for two reasons. Firstly, the period corresponds to governments’ tax years in which they assess from an annual perspective how much tax is payable to the state from individuals and corporate entities alike. Secondly, it is important for listed and public companies to publish their annual financial statements so that investors can assess their investment performance and market analysts can understand their business operations.
FYE does not necessarily correspond with the calendar year. It can do by running from 1 January to 31 December, but for many companies, it is not practical from a business cycle perspective. Companies are able to choose their year-end date, as long as they are set out legally and also run consistently. Many companies in South Africa tend to align their company’s financial year-end with the personal tax year dates of 1 March to 28 February. For many South African companies then, financial year-end occurs on the last day of February each year. Closing off a whole year of trading and transactions is not an easy task, so how best can company’s prepare for FYE?
Make sure your bookkeeping is up-to-date and Accurate
It makes sense that if your company has stayed on top of month ends during the course of the year, ensuring they are as accurate and timeous as possible, it makes closing off the financial year as a whole that much easier. Maybe you have let a month (or months!) slip but FYE is the time to catch up and tie up all those loose ends. Ensuring that each month-end has been correctly completed, that each section is accurate, and is properly reconciled helps ensure your year-end is accurate and complete. Prepare bank statements in advance and have everything you need ready to go as soon as the time comes to close off your year-end. A good accounting software program goes a long way towards automating this process as well as ensuring accuracy and balance between all the accounts.
Check your Inventory Levels
Doing a stocktake in good time before year-end ensures the accuracy of your balance sheet. This checks that your expiry dates are accurate, account for shrinkage and ensures you have an accurate picture of your stock on hand. Inventory checks do not just take account of stock levels but also consumables and assets on hand. This ensures your asset register is up to date and also helps to advise the future year’s budget in terms of any asset purchases that will be required. Doing your inventory check ahead of time helps to make your FYE smoother, more accurate, and on time.
Assess your Accounts Payable and Receivable
Your accounts payable and accounts receivable reports are other items to prepare and interrogate. You should start by reviewing the ageing reports to make it clear what is due to be paid within the current financial year and what is due to be received as income within the current financial year. This allows the accounts team to chase payments and budget correctly to ensure debts that are due, are settled, and income due is received timeously. It is also an opportunity to work on either bringing forward accounts payable transactions or delaying receivable income to the new year to affect the taxable income for that FYE.
Plan your Tax
As one of the core reasons for having a financial year-end is for government to be able to calculate the amount of tax your company is liable to pay, it follows that planning your tax is an important preparatory step before completing your FYE. Tax planning involves planning your finances in such a way as to pay the least amount of tax that is allowed under the law. Tax planning allows you to plan transactions by accelerating or delaying them either into the current year or to the future year to save you in taxes. One strategy is to accelerate any expenses that you can and spend them before year-end, thereby lowering your total profit for the year and reducing taxable income. This could take the form of increased advertising spend, software license renewals, or major asset purchases. In some cases, businesses will defer sending invoices until the new fiscal year- where possible and under the ambit of the law- in order to reduce income before year-end.
Analyse Your Business Year and Plan for the New Year
The end of the financial year is an opportune moment for business managers to really analyse the performance of their business from a more bird’s eye view. It allows owners and managers to see what worked and what didn’t. It allows you to see trends in your business and also allows you to forecast for the new financial year. Budgeting for the new financial year is almost impossible without an accurate view of the performance of the previous year. A budget involves an estimate of future income and expenses for the set period of time (the new financial year). This involves marketing spend, staff quotas, and assets forecast requirements- all balanced against a sales and income forecast. All of this relies heavily on accurate and timely financial year-end.
Financial Year End can be a major stress factor for many account teams, but it plays a vital role in analysis and planning in a business, not to mention fulfilling the requirements set out in a country’s taxation law. Being prepared and making use of a good ERP (Enterprise Resource Planning) or accounting package such as Omni Accounts can ease the burden of this important financial process.
Are We Ready?
The question of whether South Africa is ready for the Fourth Industrial Revolution (4IR or Industry 4.0) is a hot topic. 4IR has been hailed as a transformative moment in an economy. Cyril Ramaphosa has asserted that the Fourth Industrial Revolution is the answer to South African economic woes and the widening inequality gap. But what is the Fourth Industrial revolution, and more importantly, is South Africa ready to embrace 4IR?
What exactly is the Fourth Industrial Revolution?
In order to understand what the fourth revolution is, it is useful to first understand the previous three. The First Industrial Revolution, around 1780, harnessed the power of steam and water to mechanise production. The Second Revolution in circa 1870 utilised the development of electricity to transform the mechanisation process onto a mass scale. The Third Industrial Revolution from about 1969 harnessed the power of IT (information technology) and the internet to digitise services, production, and distribution.
The Fourth Industrial Revolution is a grand plan for countries around the world that are digitally ready to harness the power of Artificial Intelligence (AI) and robotics to propel their economies forward. Noteworthy is that 4IR does not involve any of the technologies in isolation. It is a fusion of digital devices, smart factories, human brain modifications, gene editing, intelligent robots, and autonomous vehicles (to name but a few).
The concept originates from 2011 from a high-tech strategy of the German government that sought to promote the digitisation of manufacturing. It was later reinvented by Klaus Schwab of the World Economic Forum (WEF), as 4IR where technologies and biological advances were presented as having the potential to advance digitally-ready countries into a new era of, previously unheard of, economic prosperity.
How does South Africa fit into 4IR?
In July 2019 the first Fourth Industrial Revolution (4IR) Digital Economy Summit was held in South Africa. Here President Cyril Ramaphosa positioned Industry 4.0 as an opportunity for South Africa to harness R5-trillion in value over the next decade- approximately the size of SA’s current GDP. He was reported as saying that businesses can “unlock economic potential and create a Silicon Valley” in South Africa. To realise this, he has set up a 30-member commission to provide advice to the government on how government strategies and policies could support this endeavour.
Ramaphosa’s enthusiasm has seen 4IR sung as the new anthem for the rescue from the economic crisis facing South Africa, the veritable hero that could jettison the country out of its economic gloom. However, the questions remain: is Industry 4.0 all it’s cracked up to be, and moreover is South Africa ready to harness such technologies to the benefit of the population?
Is South Africa ready for Industry 4.0?
At the very same summit at which Ramaphosa sang the praises of Industry 4.0 in July 2019, keynote speaker, US-based geopolitical forecaster, and strategist George Friedman, suggests that 4IR may not be the economic messiah for South Africa. His unpopular opinion is that South Africa would be better served by focussing on a low wage labour model and export it, following the model used by China in order to build the economy before moving to 4IR.
Instead of trying to skip the phases that developed economies such as the US, China and Japan underwent, SA needs to place far more emphasis on a low-wage export system, Friedman said. His belief is that so much of the South African population is impoverished and lacks access to technology, that it will not fully reap the benefits of 4IR- or indeed that it may greaten inequality in the population.
Many also argue that a look back at the previous three industry advances shows that they did not necessarily advance the prosperity of the working classes and poor, instead they were largely to the advantage of big capital– and that South Africa’s alienated poor run the risk of being no different.
In a survey run by Deloitte’s, 100 South African executives were polled- along with others around the globe- about their view on the promise of 4IR and their companies’ readiness to embrace it. Only 4% of SA executives polled- versus 14% globally- were confident about their business’s readiness to embrace Industry 4.0. A staggering 73% of SA executives felt that 4IR technology would replace human workers rather the complimenting them, as opposed to 47% globally. While 86% of global executives believed that they were doing well at preparing their workforce for Industry 4.0, only 63% of South African executives agreed.
Many worry that South Africa’s lack of infrastructure, skills base, and low levels of digital literacy would hamper the ambitious plans held by Ramaphosa and his commission.
Global analysts warn of the allure of the 4IR cure-all. They suggest that through all of the hype of Industry 4.0 and the speed at which technology is being harnessed globally safeguards and proper infrastructural support seems to be lacking– particularly in developing and under-developed countries. As Karen Allen writes for the Guardian UK “the dash to digitise comes with potential pitfalls –vulnerabilities that make the continent particularly exposed to data manipulation and cyber-attacks, even before a fully automated revolution such as the internet of things and artificial intelligence become a daily reality.” She cites the ransomware attack of City Power Johannesburg in July 2019 as just one example of the continent being under attack before it has even got on its feet with 4IR. Another she uses is that of the Cambridge Analytica Facebook scandal where it was revealed that 60,000 South African internet users information and security had been compromised, and where Kenya had been used as a testing ground for the company’s many dubious strategies.
4IR is not all bad and has certain tremendous economic advantages when used and supported correctly in an economy, helping to secure and exploit a competitive advantage in the global marketplace. There is no doubt that harnessed correctly the Industry 4.0 wave could jettison parts of the South African economy forwards. The questions remain of whether this benefit would be felt by all South Africans or just an elite few, and also whether South Africa is- technologically speaking- trying to sprint before it can crawl.
How do customer loyalty programs work?
It is one thing to attract new customers, but it is quite another to keep them in the face of staunch market competition. Enter: Customer Loyalty Programs, known also as rewards programs, points cards, advantage cards or club cards. The market is awash with Loyalty Programs, with everything from your coffee takeaway to the local carwash offering points or rewards for your return custom. But how do loyalty programs actually work?
What is a customer loyalty program?
Loyalty Programs are specifically designed marketing programs that are structured to encourage customers to continue using the goods or services offered by a particular business. They exist in almost every sphere of the economy from airlines to retailers to leisure services. Usually, they take the form of a plastic or paper card on which purchases are recorded, but more sophisticated ERP systems (Enterprise Resource Planning) are able to track customer points digitally via customer numbers, mobile numbers, or other tracking systems- and allocate points automatically. When presenting their identifying information, customers are either rewarded with a discount at the point of purchase or ‘points’ are allocated for future purchases or rewards once a threshold is met. Usually signing up to the system is facilitated by customers filling out a form and agreeing to the business or merchant using and keeping the customer’s information in order to allocate rewards.
What are the advantages for the customer?
By returning to a certain vendor over time, customers are rewarded for their loyalty. This can be in the form of select offers, discounts on future purchases, or even free gifts. More and more as consumer power increases customers are demanding such programs. With the robust market competition for consumer purchases, businesses can feel pressurised to offer such loyalty programs in order to keep up with the market. But are these rewards programs only about customer benefit?
Certainly, a major aspect of loyalty programs is about retaining the customers that a business has worked hard to win over in the first place. Generally speaking, it is more expensive to market and persuades a first time customer, than it is to satisfy and maintain an existing customer. Usually running a loyalty scheme or program works out more cost-effective for a business than winning over new customers all the time. Moreover, most companies will run a loyalty program on top of existing marketing campaigns. That means that they will retain their existing client base while attracting additional customers on top ultimately growing their business. Furthermore, active loyalty programs can act as a great incentive to new customers, who are persuaded by the long term benefits of loyalty and repeat purchases with a particular firm.
Marketing and product development insight
While maintaining an existing client base is a very important role for a loyalty program, it can be argued that the information that a business is able to harvest and use from a loyalty scheme is even more powerful. Especially in the case of fast-moving consumer goods (FMCG) where customer accounts are not created and information about clients not gathered for the purchase (in the case of major grocery retailers for example)- a loyalty program allows a business to do just this: gather information about an, otherwise anonymous, the consumer. It is a bit of a “tit for tat” scenario, where business and client enter into a deal with each other. The business gives rewards or discounts, in exchange for tracking customers’ purchases and habits and harvesting personal marketing information about them.
Information is power. And in the case of business and marketing, this could not be more true. In order to sign up for a program, one is asked to allow the business to keep and use customer’s personal information (usually agreeing not to share it with third parties), and so businesses are able to collect information previously unavailable to them. How old are their customers, where do they live, what age are they? All these insights assist businesses in appealing better to their current target market, and also identify gaps in their current market base as well as new segments that are untapped. In addition, finding out the purchase habits of their existing customers is invaluable. With that information, you can see who buys what, when they buy it, how much they buy, and what else they buy at the same time. It helps you to understand how and when price promotions should be offered and to what level, and also enables a business to make use of targeted marketing campaigns. For example, businesses can send vouchers for different baby products to a customer who has previously purchased nappies to encourage them to trial new products in their business; or send a discount voucher for a newly-launched face cream to a customer who has previously bought face cream in the store and is, therefore, more likely to be interested in face care product information and offers. The opportunities for tailored marketing campaigns are almost endless when a wealth of data is available to a business.
Loyalty programs are a win-win for both customer and supplier. When run effectively they can provide real benefits to customers- that in turn increases repeat purchase for the business. When the data is effectively analysed and used by a business, the customer can receive targeted marketing offers that are of real interest to them, and the business has a whole array of market information at their disposal to increase current customer spend and attract new customers to the business.
Buying Local SA
Buying South African products is a much-talked-about subject. “Local is Lekker”, “Think global, Act Local” are all phrases coined by those who encourage local purchases. While international products are sometimes called for, and sometimes the benefits of buying internationally outweigh any local advantages- there are strong advantages for a consumer when making the decision to spend hard-earned cash locally.
Products designed for the local market
International products, in their very nature, have to be international which means they need to be more generic and suit a larger spectrum of situations and customers. To keep costs down, international suppliers need to provide largely homogenous products, with minimal customization to local markets, in order to keep costs down and profits meaningfully. Local suppliers do not face this challenge and customers are more likely to receive a product that is specifically aimed at the South African market. South African products tend to be tailored to meet the uniquely South African challenges that are faced in the local economic sectors- in a way that international products simply cannot do economically.
Product Support is local
A local product means that the product support is local. When implementing or seeking help with faulty products, having people on the ground with knowledge means that on-site assistance is possible. Not only that but the support is experienced in dealing with South African challenges. Many of us have had the experience of calling through to a helpline, only to speak to someone in the middle of Manila or Bangladesh, who has no idea what it is like to operate in a South African context. Local products also help with making manufacturers and vendors more accountable. They are not just an email address, website, or telephone number – but are bricks and mortar, in your area, with real people to speak to in person. They are also much more subject to consumer protection laws that can struggle to apply to firms offshore.
Buying local supports the South African economy which in turn supports you
Why Buy Local? This question is best answered by Michael H. Shuman, author of the book Going Local. “Going local does not mean walling off the outside world. It means nurturing locally owned businesses that use local resources sustainably, employ local workers at decent wages and serve primarily local consumers. It means becoming more self-sufficient and less dependent on imports. Control moves from the boardrooms of distant corporations and back into the community where it belongs.” (Shuman 2000).
There is no denying it. When consumers spend their money on local products, money and wealth stays in the community and South Africa as a whole. Wages are paid with that money, local suppliers are paid with that money, the profits are put to use locally- all contributing to an economy that will come full circle, and ultimately have more cash to spend on your product or business. When one chooses to buy internationally- the employees who are paid are not South African, the supplier businesses are not South African and the economy is not enriched in the same way.
Develops a market with more consumer choice
A local economy that is full of small businesses, all working hard to innovate and provide superior customer service is good news for the South African consumer. It ensures that the marketplace is robust, that innovation is constantly occurring, and that South Africans have a proper choice when it comes to their purchase decisions. In the long term, this healthy competition leads to lower prices and breeds a culture of entrepreneurship that boosts the economy overall. This vibrant marketplace can only be achieved, however, when South African consumers and South African businesses choose to support local firms and products. Without South Africans choosing to spend their cash locally, local businesses and economies cannot develop or thrive- and local consumers will have increasingly less and less choice and power when it comes to the products available to them.
A resilient economy
When an economy imports more goods and services than it exports- that means more money is leaving the country than entering it. This is known as a trade deficit or negative trade balance. When South Africa is in a trade deficit, not only is this bad news for the country’s finances as a whole, but it also makes the economy much more vulnerable to external and global economic shocks and changes, such as US dollar exchange rates and price of oil. An economy that fosters diverse and competitive local businesses and a culture of buying and supporting local suppliers and products is much more resilient against international events and pressures. Buying local South African goods and services is an integral part of developing a strong and stable local economy.
Buying local South African products has many benefits, some short term, and some long term. What is important is that a thriving local economy is good for all, and it can only develop when it is supported by the local communities.
What are the key differences between accounting and bookkeeping?
While bookkeeping and accounting both fall under the accounting umbrella, the biggest differentiator is bookkeeping doesn’t involve the analysis of financial data.
Accountants form an integral part of any business by ensuring all fiduciary responsibilities are adhered to. Basically, an accountant will analyse all financial transactions evident in statements and business reports, ensuring that they meet all necessary accounting standards and principles. Using financial analysis, accountants are able to provide a full report on the financial performance of any business, empowering business owners to make informed financial decisions.
An accountant will have many day-to-day activities to meet all financial needs but there are four main accounting duties in any organisation:
- Financial analysis and consultation
The company’s financial data will be assessed and advice shared on the correct measures to be taken to ensure financial stability and growth.
- Data management
The accountant is responsible for the storage and management of all financial data, constantly researching new techniques and products for effective data storage, then updating where necessary. An accountant has the final say on which accounting system will be used within a business.
- Compiling financial reports
All necessary SARS-related business reports and statements will be compiled by the business’s accountant.
- SARS regulatory compliance
There are constantly new tax regulations and tax procedures that need to be followed to ensure a business is SARS compliant. An accountant is responsible for maintaining communications with SARS, and ensuring the business is up-to-date with all tax requirements.
How to qualify to be an accountant
Becoming an accountant requires more than just having a good idea of how everything works. To qualify as an accountant, the minimum requirement is attaining a Bachelor’s Degree in accounting or a related field, but there are many more levels beyond this. In South Africa, an accountant will ideally have completed a Bachelor of Commerce followed by a three year learnership at a SAIPA-accredited training centre. This is followed by a SAIPA Professional Evaluation exam which is a four-hour competency exam.
Becoming a Chartered Accountant (CA) requires further qualifications and these positions are generally found in the commerce, industrial or non-profit sectors. A CA will undergo more training than an accountant including an academic post-graduate programme followed by at least three years under a mentorship. The work’s focus is generally the provision of accurate records of all financial transactions for an individual or business.
Bookkeeping doesn’t require the same level of qualification as an accountant; however, bookkeepers are still responsible for the financial aspects of a business such as monitoring the chronological order of all financial transactions, as well as summarising financial data in reports. Fortunately, there are a number of software options available to assist with bookkeeping these days.
Depending on the particular company or industry, a bookkeeper’s duties will vary, but there are certain elements that could be associated with the job description. These include:
- Maintaining best bookkeeping practices and ensuring compliance with the company and SARS
- Maintaining records and all backup data
- Training staff on all bookkeeping activities
- Developing credit and debit accounts
- Assigning expense categories
- Entering income and expense information into bookkeeping software
- Payments in the form of cash
- Handling of banking activities such as new deposits
- Recommending and managing accounting software, bookkeeping policies, and procedures
- Checking the accuracy of information
- Balancing accounts
- Flagging financial discrepancies and assisting with company auditsProviding assistance to the accountant for duties such as payroll
How to qualify as a bookkeeper
Unlike an accountant, a bookkeeper will not need a tertiary education, rather a matric or equivalent will suffice for a job in bookkeeping. However, the best way to succeed as a bookkeeper is by completing a course, of which there are many available. For entry-level bookkeeping positions, there is often no previous experience needed, although knowledge of standard bookkeeping practices and bookkeeping software will be necessary. Certain organisations might be looking for candidates with either experience or a relevant Bachelor’s Degree.
What are some of the similarities between bookkeeping and accounting?
To the untrained eye, bookkeeping and accounting appear to be the same profession – or extremely similar at the very least. And while this is not completely correct, there are some overlaps between accounting and bookkeeping. Both job descriptions:
- Work with financial data
- Require at least a basic knowledge of accounting
- Classify and generate reports using financial transactions
What are some of the differences between bookkeeping and accounting?
- One of the main differences between bookkeeping and accounting is that accounting involves the analysis and interpretation of financial data while bookkeeping does not.
- Bookkeeping includes financial record-keeping, which is the basis of accounting, while pure accounting includes the use of these financial records for report preparation and financial analysis.
- A basic understanding of accounting is the qualification for a position in bookkeeping while tertiary education and a higher level of expertise are needed for accounting.
Advantages of bookkeeping for a business
There are many ways that bookkeeping can assist a business. These include:
- Sars Compliance
Businesses can be assured that they’re meeting all legal obligations by recording and tracking the income and expenses, as well as paying the correct tax amounts on time.
- Business Accountability
Through the process of bookkeeping, businesses are able to keep on top of all transactions as well as pick up any transgressions swiftly. This ensures complete business transparency.
- Internal Control
With modern bookkeeping software, business owners are able to pick up on fraudulent activity within the company themselves rather than relying on a lower-level employee.
- Improved Investment Opportunities
Bookkeeping allows for improved transparency which makes securing investment from other organisations much more likely.
- Informed Decision-making
Through bookkeeping, business owners have access to hard data on the business’s financial position. This allows business owners to make informed decisions for enhanced business growth.
Although there is a distinction between bookkeeping and accounting, smaller organisations might require bookkeepers to perform accounting duties and vice versa. With the support of high-quality bookkeeping and accounting software, the job duties can be administered with much more ease and efficiency.
Myths of Cloud Computing
Whenever there is a rapid rise of new technology, we also must sift through the hype and misconceptions that follow. Cloud computing is one of those technologies where almost everyone has an opinion, and yet there is still a lot of confusion when it comes to sifting through the facts and myths. Below we take a look at some of the myths that prevail.
Everything works better in the Cloud
Not all businesses and not all applications work better in the cloud. Many applications will run in the cloud, but some will not, or it will be too big of an inconvenience to move them to the cloud. You may be using older applications or have internal dependencies that make it too expensive or difficult to migrate. And some companies have security contracts that simply forbid moving sensitive applications or data to a public cloud. It is not an all-or-none proposition, and it isn’t for everyone. Some systems work fantastically on cloud and some applications simply run better on-premises.
Moving to Cloud is not safe
This myth is simply not true. Security is important for data whether on-premises or in the cloud. The reality is that security breaches are possible wherever it is that your data sits, depending on the level of precautions taken. In a hyper-connected world, no business is immune to the threats of cyber-attacks, data leaks or the associated risks. The cloud does not remove the threat of data leaks or attacks. But this is not necessarily a reason to avoid the cloud. Cloud providers have extensive firewalls and encryption with entire departments devoted to security, much like a private firm’s security precautions. On-premises and cloud alike are both vulnerable and both need to take extensive precautions against network and data attacks or breaches.
The Cloud is never down
Server or on-site hardware failures can leave businesses feeling exposed and may act as an argument to move to cloud. The reality is somewhat different. Certainly, a move to the cloud ensures that your business is not a slave to one server’s success, or the gremlins inherent in hardware. However other issues creep in, especially in a South African business context. Internet speeds and connectivity are issues that plague the South African business landscape, with load-shedding being another threat to that limited connectivity. If you can’t connect to the internet- you can’t access your data or applications in the cloud. Similarly, if there are issues globally or at the site of your cloud’s data storage, you will be affected wherever you are in the world.
The Cloud is always cheaper
This is a bit like saying that it is always better to rent a house. It is only true in certain circumstances. If you do not intend to live somewhere very long, or you are not certain of your growing (or shrinking) needs or you have a habit of not knowing when you will need to move again quickly- renting is an excellent option. If you know you will stay for some time, and are certain of the demands cost-effective- buying can be a good investment and cheaper in the long term. The same applies to the cloud versus on-premises. Some businesses need extra flexibility, with frequent peaks and troughs in their data needs, and in those cases, the cloud is an excellent and often very cost-effective solution! The cloud is very good at scaling swiftly in relation to a business’s needs, which may change quickly and frequently. Other businesses find that moving and keeping their data in the cloud does not work very well or works out to be far too expensive versus keeping it on-site. This depends very much on a business’s backup needs, the number of users who need access to the data and applications as well as the number of applications. Some businesses need multiple users to access, many applications to run concurrently- and sometimes the cloud just works out to be a lot more expensive than hosting on-site.
Cloud data is Public
“Because the term public is used, many users have the false impression that the data that they store in the cloud is easy to get and is not private,” said Engin Kirda, co-founder and chief architect at Lastline, a network security provider. It is true that data that is hosted free of charge, in the case of companies like Gmail or Facebook, is used for marketing and analysis purposes. However paid-for cloud data is different. Companies that sell cloud space have very strict privacy and security guarantees for clients’ data, central to their business model. Spying on their customers’ data would be very harmful to their businesses, and there are very strict protocols for businesses to protect who has access to their data. One aspect of ownership of data is questionable. If a business does not pay the licence or access fee, they lose access to their data and applications, and therefore control of your business’s data is limited in that regard.
As with any technology, cloud suits some applications and businesses better than others and is not a “one-size-fits-all”. Some businesses can gain tremendous advantages by using cloud and the flexibility and access advantages it can provide. But for many other businesses, the cloud trend is not always that suitable, that beneficial, or even possible. What is most important is that you do a thorough analysis of your business’s needs, and assess whether cloud or on-premises is the better and most cost-effective solution for you.
What Should I Look For In An Accounting System?
The basics of accounting systems, at the very least, should cover the main aspects of a business. These basic aspects are:
- Tracking income. Which covers invoicing and managing money received.
- Tracking expenses. Which covers buying products for resale and paying overheads such as wages and rent.
- Providing reports showing the profitability of the business.
Most accounting systems should cover these basic aspects. It is however vital that you define your needs before you start to look for one. There are many bookkeeping software solutions out there and if you don’t define your most important requirements before you start your search, you will end up feeling overwhelmed and confused.
The type of business you have will greatly determine your accounting requirements. A plumber has very different needs from a retail shop. The next factor to consider is the size of your business. If you have many employees and perhaps have some branches in different locations, you will be looking for accounting software that can handle these volumes and requirements. Whereas if you have a couple of employees and a small shop your needs will be quite different.
It’s also helpful to look at your current frustrations and problem areas within your system of accounting as well as what currently works well. These will help you define your ‘must have’ features.
What are the Basic Features of an Accounting System?
There are some basic features that are a requirement for accounting software no matter what type or size of the business.
Fully integrated single entry system
This means you enter information into the system only once and all necessary accounts and records are updated by this source entry.
The software and the database should be stable and robust. Having a bookkeeping software that is unstable and prone to errors or a database that often is prone to corruption will compromise your data, cost you money, and cause endless frustration.
Easy to use software
You should not need to be a fully qualified accountant to use the software. The processes should be easy and user-friendly.
The system must be able to save you time and make your business accounting processes run more efficiently.
Comprehensive audit trails
It is important that each function and transaction is tracked and that you can find the originating source entry easily. This means that any capturing errors can be easily traced and corrected. It also makes life easy for your accountant or auditor.
Easy month and year-end procedures
Month Ends and Year Ends should be quick and simple and there must be the ability to backdate transactions.
Reports should be easy to extract and be flexible so that you can extract information quickly and in the format you require. Extracting statutory reports easily is essential.
Ability to export data
Options to export data to spreadsheets are extremely useful.
Compliance with basic accounting principles
Good accounting support
Especially in the initial phase and also on an ongoing basis you will need to be able to access support from the vendor. This should be available via email, telephone, and remote login. It has been said that buying an accounting system is much like getting married. You need to be wise and due diligence in your choice of partner.
Once you have checked the essentials, then depending on your type of business and the number of people that will be using the accounting software, there are further considerations.
A business is never static, it either expands or contracts. It is vital that the system is able to grow with your business. So, ensure that the system will be able to handle the requirements of your business as it grows. The ability to add-on functionality to the system should be readily available and not be a major exercise involving migrating data and retraining staff. The add-on functionality should be fully integrated, essentially providing an ability to grow the system into a full ERP (Enterprise Resource Planning) system.
Ensure the system can handle the number of staff that will be using it currently as well as the likely increase in staff as the business expands. These should be concurrent users, which means the number of people using the system at any one time.
For a business that has multiple staff members using the system, it is important to ensure that the ability to control what functionality and information the various users have access to. Some information in accounting is sensitive and confidential and it is important to ensure that you have control over this.
In today’s world of globalization, it may be useful to have accounting software that can handle working in different currencies.
With the ever-increasing use of the Internet, very few businesses can now do without a website. Many software solutions provide the ability to integrate into a website. It may also be useful to integrate into third-party software solutions, depending on the type of business.
Try and talk to some other businesses who are using the accounting product. It is even better if you can find similar types and sizes of businesses to yours. Websites and advertising material only show the good stuff. Talking to existing users of the product can be extremely useful.
These are just some of the key points to look at when looking for an accounting software solution which often gets overlooked in the search to find a solution which fulfils your requirements.
It is important to take these factors into consideration and not to just think of the immediate short-term requirements, but to look for a product that will grow with your business.
It should not be a process you rush into as the process of migrating to a different accounting package is time-consuming and costly.
The advantages of using accounting software in your business
Accounting software assists businesses in effectively monitoring the flow of finances. In South Africa, many companies are using accounting software to minimise administration and ensure SARS compliance.
What is accounting software?
Essentially, accounting software allows business owners and accounting professionals to easily and efficiently process all transactions and manage accounts. The flow of all accounts is recorded, which allows for quick internal and external review as well as the auditing of accounts. In South Africa, accounting software is often used for small to medium-sized businesses, with large corporations generally relying on their own internal accounting software.
What are the types of accounting software?
Every company is different, and that means varying accounting requirements. No matter your business type, however, there is a form of accounting software that will meet your unique business needs. Some examples of accounting software types include:
- Payroll management systems
For a business needing a handle on account payables and receivables, then this accounting software is the best fit. It performs tasks such as salary calculations and payments, deductions, and generating payslips.
- Enterprise resource planning (ERP) systems
A very valuable accounting software, ERP solutions combine all systems used for product planning, material purchasing, inventory management and control, distribution, accounting, marketing, finance, and human resources.
- Billing and invoicing systems
All daily accounting tasks such as outstanding payment notifications can be performed by this system.
- Time and expense management systems
By speeding up the billing and expense approvals, this system ensures quicker payment collections while detailing how time and resources are used.
What are the features of accounting software?
Accounting software in South Africa differs greatly, which means that the features included will also differ. There are, however, some core features such as:
- Accounts receivable
- Accounts payable
- General ledger
- Billing and invoicing
- Inventory or stock
- Purchase order
- Sales order
In addition to these key features, accounting software options could also include some added extras such as:
- Debt collection
- Electronic payment processing
- Purchase requisition
- Automatic data backup
- Budgeting and forecasting
- Check printing
- Comment capabilities
- Cost predictions
- Customisable reports
- External application integration
- Fund accounting
- Inventory management
- Password protection
- Payroll management
What are the benefits of accounting software?
If you are considering investing in accounting software for your business, but are still unsure whether it’s the best way to spend your hard-earned money, then here is an outline of the substantial benefits.
1. Saving on time
By replacing manual calculations and record-keeping, you are able to save on valuable working hours that could be far better spent on achieving long-term business goals. If the bookkeeping tasks are handled in-house, you are now freeing up an employee to perform other business-enhancing activities.
2. Decrease errors
The reality is that human error is one of the biggest issues when it comes to in-house accounting – something that is mitigated when you implement accounting software. Mistakes in calculation and typing will be removed as this will be organised by the software. Many programmes will be able to automatically make calculations as data is entered into the system, transfer funds, and adjust assets. Any miscalculations are quickly identified and corrected.
3. Cost savings
While many companies might hesitate to implement accounting software because of the initial or monthly costs involved, it’s important to note that these costs will be absorbed by the long-term savings. The afore-mentioned time savings translates directly into increased work hours, and there is no need to pay an extra salary for accounting duties. In addition, minimising error and ensuring tax compliance means no penalties at a later stage.
4. Management of finances
With manual accounting, most work is done at the end of the financial year when businesses prepare tax records. However, with accounting software, there is ongoing financial updating which means you are able to have a more accurate overview of the business finances at any given time. This allows you to resolve any minor issues before they escalate, or identify areas where you can improve business operations. By tracking your payables and receivables, you are able to assess your future cash flow and amend where necessary.
5. Secured Database
Accounting software is password protected and, depending on the type, could come with additional security measures to prevent confidential information from being leaked or numbers tampered with. Because your financial data is being stored digitally, you are able to protect it from outside elements such as natural disasters.
6. Synchronisation of information
Most businesses anticipate growth and, alongside this expansion, comes an increase in the amount of administration needed for daily operations. Using accounting software, you are able to synchronise your respective files across a variety of platforms, making access to information much simpler. Certain accounting software types are able to provide real-time status updates as well.
7. Ongoing tax compliance
Keeping up-to-date with all the SARS requirements can take hundreds of hours – time which could be better spent on improving business operations. Without tax compliance, however, your business is likely to incur unwanted penalties. By using accounting software with tax features, you are ensuring all South African tax regulations are adhered to without any of the hassles.
8. Track inventory
If your business manages inventory then software accounting will track the inventory as product orders are processed. This means you are always able to monitor how much product inventory you have with orders made when the product gets too low.
What to ask your accounting software suppliers
Before committing to any South African accounting software options, here are a few questions you should ask first:
- What are the costs of updates?
- How often must the software update?
- Does the software run online or offline?
- Can I access the accounting software from a mobile device?
- Is there a trial period?
- Do you offer any training?
- How long does the software setup take?
- What security options are available?
- What data backup options are there?
- What features are included in the software?
- Are there different pricing options?
- Could you outline what support services you offer?
- Do you have any client recommendations I could review?
If you are the owner of a small or medium-sized business, then investing in accounting software will positively impact your day-to-day and long-term business operations. It’s worth consulting with local industry experts to ensure you are choosing the right software for your particular business model.
Is Cash Still King?
Let’s be clear on the definition of cash as it is used in this article. Cash means hard currency, actual money. It does not mean money sitting in your bank account. When a customer walks into a retail shop they will pay for their purchases either with actual cash, or with some sort of debit card or credit card, or maybe by scanning a code using their mobile phone. There are even digital currencies (cryptocurrency) such as Bitcoin that are becoming more recognised.
Consumers are moving away from the use of cash in recent years, instances of payment via bank cards have slowly been increasing, with both debit and credit cards being used regularly. For a customer, not only does transacting in ‘plastic’ lighten the wallet, but it is also far easier and more secure than carrying cash around on their person.
It is expected that soon, the world will be cashless, with all transactions either being processed online or by card. The race for a cashless country is currently on with Sweden in the lead with only 15% of transactions involving cold, hard cash. Having said this, cashless countries are not only limited to developed countries, but cash is also even threatening to become extinct in countries like Somaliland and India.
Card Payment Benefits
Due to the demand by consumers more and more businesses now offer some type of cashless payment option.
The more payment options a business can offer a customer, the more chance that the customer will purchase. Many consumers do not carry much cash and would be more likely to an alternative vendor that accepts credit card transactions than they are to find an ATM to draw the cash and return. Offering a wide range of payment options also encourages impulse buying. It never feels too expensive when you just hand over your card.
Businesses are also less at risk when they are not having to deal with large amounts of cash, which needs to be counted, locked away, and then taken to a bank to deposit. Adding to this hassle and expense are the charges that banks levy on handling cash.
For a business, this results in a speedier service and creating a safer environment for the consumer.
Card Payment Challenges
Once a business has signed up as a vendor and obtained a credit card machine, then the headache of how to control this payment method using their current Point of Sale (POS) System begins. Once all the purchases are entered into the POS System and a total amount payable to given to the customer, the POS teller will obtain the customer’s card and enter this total amount into the Credit Card machine. Once the customer has entered their PIN number, the machine will connect and try to authorise the transaction. Only once the payment has been authorised, should a Tax Invoice be generated by the POS System, this must be manually done by the POS teller. This process can be quite time consuming, which is not ideal in a busy retail environment. Long queues are not a way of attracting customers to your store.
Another problem is the amount of manual intervention in the process also means there is room for fraud as well as error. There is no guarantee the teller will key in the correct amount into the card machine, for example.
Another headache is the manual reconciliation at the end of each trading day of all the different credit card payments, which will not necessarily be deposited in your bank account in one lump sum.
The Solution – An Integrated Card Payment System
An integrated Card Payment solution is one in which the Point of Sale (POS) software, communicates directly to the Card Machine. This means that once the purchases are all entered into the POS system and the customer indicates they wish to pay by card, the POS System will send the amount required directly to the Card Machine. The customer then just enters their PIN number and the Card Machine then requests authorisation. Once the authorisation is obtained the control is passed back to the POS System and a Tax invoice is printed. If authorisation is not obtained, then the sale will be incomplete and no invoice will be printed. The teller must either obtain another form of payment or void the sale.
Furthermore, at the end of each trading day, and in many cases during the day as well, reconciliations of the various card payments grouped by card type are available online making reconciliations easy and efficient.
Vexen Technologies is a South African based broad spectrum Information Technology services company that makes it easy for you to boost your business potential through the power of technology. Vexen Technologies specialises in 3rd party integrations with credit card providers, and they have designed solutions that allow Enterprise Resource Planning (ERP) Vendors to integrate directly with a credit card machine. Presently working with ABSA, Standard Bank, and Nedbank; there is no restriction on the type of card that Vexen Technologies is able to work with. With Vexen Technologies, you will find that there is never a reason to turn a customer away. With their revolutionary credit and debit card processing service, you can accept Master Card, Visa, Maestro, Visa Electron, Diners, American Express, and many more. Their highly skilled team of Information Technology and Point of Sale Specialists will assist you in securing turn-key solutions that suit your specific business needs and budget.
Omni Accounts with its powerful Enterprise Resource Planning software has partnered with Vexen Technologies, and together they have developed a fully integrated solution that integrates Omni Accounts’ powerful Enterprise Resource (ERP) software with credit card devices. Omni Accounts Enterprise Resource software also offers a fully integrated Point of Sale system which is capable of handling multiple users. This combination offers a combination that gives efficient and more secure day-to-day running of Point Of Sale retail environment and which also integrates real-time into the full Omni Accounts Enterprise Resource System.
What is the Internet of Things (IoT)?
It seems to be a modern trend to talk in acronyms and especially when it comes to technology. One of the ones that get bandied around is the IoT (Internet of Things). This is a term which is a huge subject and this article is intended to give a very basic idea, hopefully in fairly plain English, what this term means and how it affects not only peoples’ everyday lives but especially how businesses can use this new technology.
A basic definition of IoT is a variety of physical devices that connect and communicate with other devices, usually using the Internet. This means obvious things like computers, tablets, and cell phones that we are all familiar with, but increasingly more everyday objects have connectivity embedded in them, which means they can communicate with other devices and also be remotely controlled. Remote control of many devices in our homes has become a reality.
Some examples of the thousands are:
- Smartwatches like Apple Watch alert the wearer to emails and messages, monitor health and sleep patterns, and can upload health data to medical insurance companies.
- Televisions that connect to the internet are the norm.
- Refrigerators have built-in shopping lists that upload to a cell phone and cameras inside so we can check what is on the shelves while we are shopping.
- Amazon Echo (Alexa) is another example. It is a smart speaker which can act as a home automation hub.
- Delivery drones, which send messages notifying when the parcel has been delivered and to where.
It is estimated that by 2021 an average North American will own 13 internet-connected devices. It is estimated that there are currently about 26.66 billion IoT devices and this is predicted to rise to about 30.37 billion by 2020.
The other term that comes up together with IoT is Big Data. This simply means all the data that is being generated and stored by all the devices connected to the internet (IoT) and which may include data stored in older databases that predate the advent of the internet. The thing about Big Data is that there is a huge amount of it (hence the word big) and that it is expanding exponentially. It is also comprised of structured, unstructured, and semi-structured data which makes working with it a challenge. However, the ability to work and analyse this Big Data has unlimited possibilities, applications, and uses.
Without getting too technical, Big Data Analytics essentially allows the identification of patterns, trends, consumer preferences from data derived not just from in-house databases of customers, etc. but from other external sources as well, such as social media, texts from customers’ emails, web servers and mobile phone records, essentially all the IoT devices. The analysis is then done using complex applications with elements such as predictive models, statistical algorithms, and what-if analysis all delivered by complex analytics software systems.
The above is an extremely basic description of Big Data as it is a huge subject and not one that can be adequately covered in an article such as this.
IoT and Business
IoT devices and technology have a big role to play in how businesses and organisations operate. Not only can it improve internal processes such as manufacturing in a factory environment but it can enable businesses to gather information about their products once they have been sold. It can provide the ability to forecast sales and to recognise market trends. In fact, the uses are endless.
Below are just two examples of the type of technologies already used by IoT
- RFID (Radio Frequency Identification). This is a system where RFID tags embedded into objects communicate with an RFID reader device using radio waves. This RFID reader can potentially be connected to the internet. It is also possible for RFID readers distributed globally to pick up information from these embedded RFID tags. These RFID tags can also contain sensors that pick up environmental changes. The ability to have a cost-effective method of tracking and its location has huge possibilities. Just some of the endless examples of the application of RFID technology are:
- Tracking shipping containers passing through a port.
- Switchgear and Power Distribution. Monitoring signs of wear and tear and sending alerts of potentially dangerous situations.
- Monitoring location and information about raw materials and goods in a factory or a warehouse.
- Making stock takes easy and efficient.
- Access cards on public transport
- Tracking medications in hospitals
- Monitoring goods in transport for temperature changes
- NFC (Near Field Communication). This technology has its root in RFID. It uses electromagnetic fields in embedded chips to communicate with other NFC chips. There are two types of NFC chips, active and passive. Active chips can both send and receive information and passive can only send. NFC communications often use encryption to secure
- information being shared. Some examples are:
- Mobile wallets such as Apple Pay use NFC technology.
- The Tap-and go functionality (e.g. using a credit card)
- Hotel room access. Using a downloaded app on a mobile phone, you can use it to open your hotel room door.
- Easy ability to connect devices.
- Animal and wildlife tracking.
IoT is being used by countless types of industries and businesses, such as:
- Fleet Management
- Supply Chain Management
- Healthcare Industry
- Customer and Field Service related industries
- Inventory and Warehouse Management
- Retail and Wholesale businesses
IoT and ERP
From the glimpse of possibilities and the rapid expansion of IoT, it should become clear that businesses should not ignore this new reality and it is important for business owners and entrepreneurs to become informed about how IoT can benefit and will impact their business.
What is clear is that in order to take the first steps in taking advantage of Io, a business needs to have an existing Enterprise Resource Planning ERP software system in place. The volume of data that is generated as well as the need to have a centralised fully integrated system as a foundation arguably of vital importance.
This article merely scratches at the surface of the whole Internet of Things (IoT) subject. It is by no means comprehensive and is intending to try and demystify the topic in some small way.
General Accounting Part 2
There are a number of terms used in Accounting, which are often not fully understood. Below are some short explanations of basic terms used in Income Statement and Balance Sheet reports.
This report is also referred to as a ‘Statement of Comprehensive Income’ or a ‘Profit and Loss Report’. An Income Statement report is always extracted for a specific period in a financial year and often reflects the year to date values as well. Comparison figures against budgets or previous financial years may also be included.
Revenue or Income
This refers to the income a business derives from selling products and services and also by renting assets. Income such as interest on investments will not form part of the main revenue value, but will be reported as ‘Extraordinary Income’ and will not be used to calculate Gross Profit.
Cost of Sales
This is the direct cost of making sales of products (stock). It is also referred to as Cost of Goods Sold (COSG). The formula for calculating the Cost of Sales is ‘Opening Stock’ plus ‘Purchases’ less ‘Closing Stock’.
Stock (Inventory) is often revalued due to valuation methods such as FIFO (First In First Out) or Average Cost and also, in some cases, by adding in certain costs such as labour to the stock value. All of these adjustments to the value of the stock will impact the Cost of Sales. So it is important to remember that the Cost of Sales is often not just the purchase price of the stock.
To give a simple example. A stock item is purchased for R500.00. This purchase will not be reflected in the Income Statement but will increase the stock value under Current Assets in the Balance Sheet. When the stock is sold for R800.00, the stock value under Current Assets is reduced by R500.00 and posted into Cost of Sales. This the sale of R800.00 less Cost of Sale of R500.00 gives a Gross Profit of R300.00.
Should the stock be revalued to R525.00 due to an Average costing being used, then the Cost of Sale value will be R525.00 and the Gross Profit R275.00
This value is calculated by subtracting the Cost of Sales from Revenue (sales). It is also called Gross Margin. This revenue can be derived from both stock and services, depending on the type of business. Gross Profit represents the value at which the item was sold (excluding VAT) less the Cost of Sale of the item. The Cost of Sale consists of direct costs incurred in the selling and production of the item. Gross Profit shows the efficiency of the business in making sales. Gross Profit Margin is the ratio of Gross Profit to Revenue. It is a percentage showing how much Gross Profit exceeds the Cost of Sales.
These are costs that are incurred by the business that are not directly associated with the products or services which make up the revenue. Some examples are advertising, accounting fees, rental, electricity, bank charges, stationery, etc.
This value is calculated by subtracting the Expenses from the Gross Profit figure and adding any other income. This figure shows the actual profit or loss made by the business. Net Profit Margin is the ratio of Net Profit to Revenue. It is a key ratio of profitability.
This report is also referred to as a Statement of Financial Position. A Balance Sheet report is always extracted for a specific point in time and not just for a specific period. The Balance Sheet is one of the core financial reports. Comparison figures against budgets or a previous financial year may also be included. The Balance Sheet has two sections and the totals of each section must be equal to each other. Hence the name Balance Sheet. The sections are one of these formats.
- Equity = Assets – Liability
- Assets = Liability + Equity
Assets are divided into two sections.
- Fixed or Non-Current Assets.
These are assets that are not expected to be used or sold within the financial year. These assets will usually have depreciation values against them. Some examples of Fixed Assets are:
o Machinery & Equipment
- Current Assets.
These are assets that fluctuate over the financial year. Some examples are
o Stock (inventory) Holding
o Bank Accounts
o Monies owed by Debtors
Liabilities are divided into two sections:
- Non-Current (Long Term) Liabilities.
These are liabilities that that will not be paid within a financial year. Some examples are
o Long Term Loans to the business
- Current Liabilities.
These are liabilities that fluctuate within a financial year. Some examples are
o Monies due to Creditors (Suppliers)
o VAT, PAYE liabilities
o Bank Overdraft Account
Equity is the value that the shareholders of a business owner as opposed to what has been borrowed. It is also known as Net Worth. The formula for calculating Equity is Total Assets less Total Liabilities. Equity is comprised of:
- Share Capital
- Retained Income
- Shareholder Loans
Below are some common ratios that are used to measure profitability and the health of a business.
- Debt-To-Equity Ratio
This ratio shows the proportion of Equity and Debt (Liabilities) to finance the Assets of the business.
The formula is Total Liabilities / Equity
- Current Ratio
This ratio indicates the ability of the business to pay back its Current Liabilities. It is also known as the cash asset ratio, cash ratio, and liquidity ratio.
The formula is Current Assets / Current Liabilities
- Quick Ratio
The quick ratio is an indication of the shorty term liquidity of a business. It is also known as the acid test ratio or the quick assets ratio. A higher ratio is positive.
The formula is Current Assets (Stock) / Current Liabilities•
- Return on Equity (ROE) Ratio
The return on equity is the Revenue returned as a percentage of Equity. It indicates how profitable a business is using the money invested by its shareholders. The return on equity ratio is also referred to as the return on net worth.
The formula is Net Income / Shareholder’s Equity
- Net Profit Margin
This percentage shows how well a business uses its Revenue to make a profit. A higher net profit margin indicates that the business is containing its costs well.
The formula is Net Profit / Net Sales
Bad terminology is the enemy of good thinking. – Warren Buffett
It’s a term that has quite recently become a firm feature in the South African retail calendar however it’s history goes further back. It has started to turn into a global phenomenon, and Black Friday has not left the South African economy out!
History of Black Friday
The informal term of Black Friday originates from the USA where it is the Friday directly after the Thanksgiving holiday. This falls on the 4th Thursday of November and is followed swiftly by the retail event of Black Friday. Traditionally that day marks the start of the Christmas shopping season in the USA, but the term ‘Black Friday’ was not used until more recent times. The earliest evidence of the name started in Philadelphia where traffic police used the term to describe the heavy vehicle and pedestrian traffic on this very busy retail day after the national holiday. More recently the name has been attributed to the turning point where retailers start cashing in on the shopping season and moving their profit margins “into the black”. Scenes of mass stampedes and crazed shoppers flooding stores have made the international news but it was not until more recent times become a global market phenomenon.
Black Friday in South Africa
Black Friday’s entrance into the South African retail landscape too, is a more recent development. Both Shoprite (in 2015) and Takealot (2012) credit themselves for having introduced the event into the South African calendar, in terms of retails stores and online respectively. Mentions of Black Friday on social media platforms were reported to have risen by almost 300% in 2015. Black Friday in South Africa has not looked back since then. By 2018, data from ABSA’s card transaction division showed that 2 out of 3 South Africans participated in Black Friday in 2018.
SA Black Friday Trends
South Africans tend to shop for durable items on Black Friday, and data shows that many hold back on durable purchases until then. Technology items top the list for most popular deals, but long shelf-life household items are also growing in popularity. Whereas the Black Friday South African craze was initially centred in Western Cape and Gauteng, the trend has quickly spread to other provinces. While Gauteng still has the lion’s share of the spend, KwaZulu-Natal at 14.2% and Eastern Cape at 7.2% are fast-growing centres.
Black Friday Growth
As the popularity of the event has grown, so too has its reach. The introduction of Cyber Monday, and also Black November has increased the impact of the event. Increasingly South Africans are going online, and not just into bricks and mortar stores, to find their deals. And this development means that Black Friday is no longer a retail event, but an economy-wide event, with B2B enterprises not only taking part in the event but feeling pressure from their business customers to “join the party” and offer discounts.
Pessimists have claimed that the sales gimmick of Black Friday will not boost the economy, but simply compress November and December purchases into a smaller sales window. However, Nielsen has found that, far from it, Black Friday has not only started the Christmas shopping season early, it has also boosted it overall, with sales growing 8% year on year for the same period in 2018 versus 2017.
Black Friday Challenges
While larger chains and stores have seen significant upsides from Black Friday, smaller stores and chains have struggled to compete with discount levels and hype, and have lost out. Equally not all big chains find the event a positive one. “It’s just actually made retailing more difficult, because you’ve now got this spike at the end of November, which puts the additional cost into your supply chain, into your staffing and stores, and really doesn’t really earn you more money,” outgoing Clicks CEO David Kneale has been quoted as saying. Even so, he said the group had no real choice when it came to offering Black Friday deals. “The difficulty is if you don’t participate, you lose out.” Furthermore, the balance of power on Black Friday seems to have tipped from retailer to consumer. Consumers have started to view Black Friday as a time when stores must show their loyalty to their customers- and this puts pressure on industries that would not normally take part in this sort of retail event,- to offer discounts. Customers also start dictating discount levels with many claiming that existing discount levels cannot be classed as on par with global Black Friday trends.
Cyber Monday is one example of the Black Friday retail craze spreading to other areas of the economy. This now takes place on the Monday after Thanksgiving and was created to encourage people to “Black Friday shop” online too, and also allows smaller online retailers a piece of the Black Friday pie. This has also reached South African shores and forms part of the new Black November trend overtaking South Africa. This is also partly because retailers realised that the typical Black Friday occurs before the South African salary date of the 25th of the month. The spreading of the specials also assists the supply chain impact for retailers and businesses.
Without a doubt, Black Friday is now a firm and permanent feature on the South African retail calendar. It is changing shopping habits, economic peaks, and customer expectations. While overall the economic benefit is positive for the economy, businesses need to play carefully in this evolving event, to ensure customer loyalty is not lost, gains are incremental and back-end systems do not suffer.
HMRC – Making Tax Digital
This is an initiative by HM Revenue & Customs in the United Kingdom to make it easier for businesses to submit their tax returns.
VAT Registered businesses whose turnover is over the tax threshold will be required to submit their VAT returns digitally from 1st April 2019. This will have to be done by using Maxing Tax Digital (MTD) compatible software.
Omni Accounts is listed by HMRC as being compatible with MTD for VAT.
At this stage, the project is still in its initial testing and the Omni Accounts Support Team, as well as the HMRC’s SDST (software developer support team), are available to be on stand-by for a business doing its first submission.
Other components of Making Tax Digital (MTD) such as income tax, are expected to be only implanted by April 2020 at the earliest.
Making Tax Digital
It is recommended that you visit the HMRC website to obtain all the information on the MTD project.
The advantage of MTD will be an easier way of submitting VAT returns, especially for smaller businesses.
If you already use the Omni Accounts Vat Return function then, after the initial setup, the submission process is seamlessly built into preparing your VAT Return in Omni Accounts.
Please note that only Omni Accounts Business Pro, Enterprise or Premium bundles include this functionality.
Contact Omni Support if you wish to learn more.
What does 2019 hold in store for businesses in South Africa?
Unfortunately, no one has a crystal ball and there are many different opinions. What we know is that South Africa is currently experiencing a technical recession. Some experts are indicating that the country may come out of this recession in the first half of 2019 and others are more pessimistic. The IOL Business Report on 28th November 2018 states that business confidence has dropped to its lowest level since the second quarter of 2017.
The main factors that are affecting the South African economy are local political uncertainties and the world economy, especially the emerging markets. The South African economy is heavily influenced by what happens in the rest of the world and there certainly is a lot of political uncertainty and volatility in politics and economies worldwide.
On the local front, the political uncertainty is likely to last until the 2019 elections which are likely to happen mid-year. It must be remembered that even if the outcome of these elections bodes well for the economy, the effects will not be felt immediately. There may be a short repeat of a Ramaphoria type effect, but it will take time for the turnaround to happen. Turning the economy of a country around is a little like turning around a large ocean liner, it will take time.
There are many ‘bogeymen’ out there that give cause for concern. The impact of climate change should not be ignored and, as an emerging economy, South Africa is very vulnerable. In South Africa, the extreme income inequality does not seem to be improving which, along with an alarmingly high unemployment rate, are all triggers for social unrest and which in turn impact growth and investment. The state of a few public utility companies such as Eskom is in a bad way. An article in Independent Online is reporting that Eskom is close to collapse. The Rand as a currency is extremely volatile, however, it is interesting that it is amongst one of the world’s most traded currencies. However, for businesses importing goods, its volatility is a major problem. There are issues such as Brexit and the US and China trade wars that will all have their impact. In fact, something called The Butterfly Effect, which is the fact that a small event somewhere in the world can have major ramifications in global markets is something that needs to be borne in mind.
So in a nutshell, the bottom line is that 2019 is unknown territory and that there are many local and international influences that could affect the South African economy. Undoubtedly there will be many opportunities, but there are also many risks. There is much to be said for strengthening local markets and industries to improve the stability of the economy but we cannot operate in isolation from the rest of the world.
What can a South African business do to prepare for these factors?
It is important to run a tight ship. The business owner or manager needs to pay attention and keep alert to all aspects of the business at all times. Missing a small detail or not having all the facts can cause problems down the line. It is not a case of micromanaging but of ensuring that the correct controls are in place and information is accurate, current, and easily available.
Staff form an important role in most businesses and it is important to manage this resource well. It is vital that human resources are well utilised but it is also important to ensure that employees are treated fairly and with respect. Employees look for job satisfaction which is not all about remuneration but also about recognition, respect and being part of a team. High staff turnover is a major cost to a business as well as reducing efficiency and continuity.
Having a budget or financial plan and adhering to it is important. The finances of the business are critical and budgeting and monitoring costs help keep long term goals and targets on track. This means, amongst others, watching operating costs, managing stock holding, and sourcing good quality stock at the best price. Paying attention to the details is important and having a good accounting and ERP software system is an invaluable tool.
Doing everything to keep your customers should be a golden rule and every employee should strive to keep this rule. Customer loyalty is not always about price. In this day of impersonal giant corporates, customers value good, personal customer service very highly. This means constantly communicating with your customers, keeping appointments, providing quotes quickly, and providing good after-sales service. Establishing a trust relationship with your customers is vital.
Focusing on Core Business
Focusing on your core business is crucial. It is important to identify what your core business is and what your strengths in this regard. Diversification can be very advantageous and of great benefit but it is also true, that being too diversified means that resources are diluted and profitable areas receive too little attention, and less profitable areas receive too much. The old saying ‘jack of all trades and master of none’ still holds true. Diversification should be something that happens when there is a strong and stable foundation already in place.
It is also important to stay flexible and adaptable. The ability to learn from your mistakes and to be able to implement a change of direction is very valuable traits. The marketplace and conditions are constantly changing and evolving and a business has to be able to identify what is not working and to make changes. It is vital to have the correct information in order to identify the problems and it takes courage and ingenuity to make the changes.
Finally, it is becoming ever more important to have an online presence. Customers are increasingly using the internet to research products and services. A business needs an online presence to impart information about itself and its products and services. A website needs to be constantly kept up to date and interesting and use can also be made of social media platforms. If enquiries can be actioned from the web site it is vital that these are responded to timeously. Ignoring this kind of online enquiry is much like not answering the telephone.
In conclusion, it is likely that 2019 will be a challenging year, with the possibility of some major changes both at home and abroad. In order to navigate through these uncertain times, a business needs to be well managed, informed, and on the alert, not only for problems but also for opportunities.
“It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change.”
– Charles Darwin
“In any moment of decision, the best thing you can do is the right thing, the next best thing is the wrong thing, and the worst thing you can do is nothing.”
– Theodore Roosevelt
There are three general rules of accounting
General Rule One
All transactions must be recorded.
General Rule Two
The Double Entry method must be used to record transactions.
General Rule Three
Every transaction is recorded in General Ledger, also known as the Nominal Ledger.
The Double Entry System
As per Rule Two, accounting operates on the Double-Entry system. This means that every entry to an account requires a corresponding and opposite entry to a different account. The double entry has two equal and corresponding sides known as debit and credit. In the old hand-written ledgers books the left-hand side is debit and the right-hand side is credit.
The Accounting Equation
The Accounting Equation is expressed as Assets = Liability + Equity or alternatively Equity = Assets – Liability and is the foundation of the double-entry system.
The equation shows that what the company owns (its assets) is purchased by either what it owes (its liabilities) or by what its owners invest (its shareholders’ equity or capital).
Transactions are captured into General or Nominal Ledger Accounts. These accounts fall into one of the following types:-
- Assets. The items of value owned by a business, such as cash, equipment, money owed to the business and also intangible items such as goodwill, copyright, patents etc.
- Liabilities. The obligations of the business, such as money owed to suppliers, bank overdrafts, taxes due, wages and salaries due etc.
- Equity (Capital). This is the value of the business owners’ investment in the company. It also includes any accumulated reserves (usually profit) earned by the company.
- Revenue or Income. The value of money coming into the company.
- Expenses. The costs incurred by the company.
How to work out if an account should be debited or credited
Under the Double-Entry system, remembering which accounts must be debited or credited and when can be a challenge. According to Wikipedia, there are two methods to help remember which accounts have to be debited or credited and when. These are the Traditional Approach and the Accounting Equation Approach.
Accounting Equation Approach
- Assets. Debit increases the asset and credit decreases the asset.
- Equity (Capital). Credit increases the equity and debit decreases the equity.
- Liabilities. Credit increases the liability and debit decreases the liability.
- Revenue (Income). Credit increases the revenue and debit decreases the revenue.
- Expenses (losses). Debit increases the expense and credit decreases the expense.
Accounts are divided into three types:-
- Real accounts are accounts relating to assets and liabilities including the capital account of the owners.
- Personal accounts are accounts relating to persons or organisations with whom the business has transactions and will mainly consist of accounts of debtors and creditors.
- Nominal accounts are revenue, expenses, gains, and losses.
Transactions are then captured according to the account type
- Real account: Debit what comes in and credit what goes out.
- Personal account: Debit the receiver and credit the giver.
- Nominal account: Debit all expenses & losses and credit all incomes & gain.
The Accounting Cycle
When a transaction occurs, a document is created. The documents can be produced internally, such as sales invoices or originate externally, such as supplier invoices or utility bills. Both types of documents are referred to as ‘source documents’. Some types of transactions do not always have a traditional document, but normally this only applies to internal transactions such as depreciation etc.
Source documents are captured into a Journal or a Ledger and both the debit and corresponding credit sides of the transaction must be captured. The Journal is often referred to as a Subsidiary Journal or Ledger. Examples of Subsidiary Ledgers are:
- Sales Ledger. This will contains transactions from any sales related transactions, such as sales invoices, credit notes etc.
- Cash Book. This will contain transactions related to any movement of cash such as money received from customers and money paid to suppliers. Bank Statements are a source document as are receipts and deposit slips. Petty cash will also be captured into a Cash Book.
- Purchase Ledger. This contains all transactions relating to suppliers such as invoices from suppliers, electricity bills, rent etc.
All of these subsidiary ledgers or journals feed into the main General or Nominal Ledger. This General (Nominal) Ledger is made up of accounts as described above (Assets, Liability, Income etc.) and the transactions are all posted to accounts using the Double Entry method.
Journals may also be posted directly into General Ledger and this would consist of transactions such as monthly depreciation, some payroll-related transactions etc.
All the various accounts in General Ledger are often referred to as the Chart of Accounts. This list of all General Ledger accounts together with their totals is referred to as a Trial Balance report. This Trial Balance must balance, in that the total of all the credits must equal the total of all the debits. If it does not balance then the error must be found and corrected before any of the Financial Statements are produced.
The main financial statements or reports are:
- Statement of Income and Retained Earnings (Income Statement)
- Statement of Financial Position (Balance Sheet)
These reports are all derived from the Trial Balance.
Statement of Income and Retained Earnings
This report shows the income versus the expenses of the business for the accounting period and often includes the totals for the financial year. The general format of the report is:-
Gross Revenue (income)
– Cost of Sales
= Gross Profit
– Operating Expenses
+ Extraordinary income
= Nett Profit (Income)
Statement of Financial Position
This report lists all the business’s assets and liabilities and equity. It shows the long term viability of the business. It is also basically a representation of the accounting equation.
There are two common formats for a Balance Sheet. They each follow one of these versions of the Accounting Equation.
The Equity = Assets – Liability format is as follows:
+ Current Assets
– Current Labilities
– Long Term Liabilities
= Assets Less Liabilities
Nett Income Year to date
+ Retained Income (Accumulated Reserves)
+ Share Capital
The Assets = Liability + Equity format is as follows:
+ Current Assets
+ Long Term Liabilities
+ Nett Income Year to date
+ Retained Income (Accumulated Reserves)
+ Share Capital
= Liabilities plus Equity
The report must balance. In other words, the value of Assets less Liabilities must equal the value of Equity or the value of assets must equal the value of Liabilities and Equity depending on which format is used.
Manage Cash Flow
Managing cash is critical; a business needs to be able to pay its staff and its suppliers. Without these resources, a business cannot trade. Cash inflow from sales needs to be quickly and accurately updated. In order to achieve all this, it is vital to have an accurate record of your bank accounts and to regularly check them by doing bank reconciliations. A Cash Flow Forecast can then be drawn up, taking into account money due to be received as well as money due to be paid, so that arrangements can be made with suppliers or the bank if there will be cash shortfalls. This needs to be kept up to date and reviewed regularly.
Manage Debt Collection
Checking the credit history of new customers and having credit terms and credit limit policies in place all help to prevent customers from running up large debts or, worse still, defaulting. Prompt invoicing reduces queries and credit notes and encourages prompt payment. Very few customers are happy with late or inaccurate invoices. Offer settlement discounts from prompt payment. Having accurate up to date customer details and status is vital to enable effective and efficient debt collection procedures. A business needs to know what amounts are owed and when those amounts are due to be paid.
Watch Company Expenses
It is important to monitor expenses and cut back where possible. Having budgets in place helps to warn when expenses are getting too high and comparing to historical data is useful. Using Purchase Orders will ensure that when the Supplier Invoice is received, the quantities and prices are automatically checked. Effective ordering systems ensure getting the best prices for goods and services. Try and negotiate better terms and prices from your suppliers. Keeping accurate and up to date records of all expenses is essential to ensure cash flow management.
Inventory (Stock) Control
In many businesses, inventory ties up the majority of cash resources. It is therefore vital to manage this resource to reduce wastage and keep stock holding at an optimum level. Having stock shortages can lose you customers, and overstocking ties up cash. Stock levels, costs, and locations need to be up to date and accurate to ensure customer satisfaction and profitably as well as consuming the least possible cash resources.
Improve Staff Efficiency
Salaries and wage bills are also a major expenses for many businesses. Employees need to spend their time at work as efficiently as possible. From an administrative point of view, each source document should be handled by as few people as possible. For example, a Purchase Order should be generated and thereafter, the Supplier Delivery Note and Invoice, should just be checked against the Order and processed and not recaptured. The same applies to Customer Orders, Delivery Notes, and Invoices. In a manufacturing environment, production schedules need to be planned and optimised, to ensure workers can produce the end products as quickly and efficiently as possible.
Know your Market
In order to boost sales, it is vital that you understand as much about your target market as possible. Some of the questions that need to be answered are:
- Which products are your best sellers?
- What customers buy which products?
- Which products are most profitable and which are the least profitable?
- What other factors affect sales, for example, locations, sales reps, seasons, etc?
- What is the source of your customer leads and prospects?
- Which advertising platform will best reach your target market?
Once you have answered these questions, you can make informed decisions about where to concentrate your efforts and which areas you need to re-evaluate. This is a time to concentrate on your core business and to do that, you need to understand it well.
Keep Your Customers
The cost of acquiring a new customer is up to thirty (30) times that of keeping an existing customer. An existing customer is someone that needs to be valued. Your existing customers bring you to repeat business- a happy customer will tell a few of their friends, an unhappy customer will tell most of their friends. Never underestimate the power of word of mouth.
Some of the main ways to keep a customer are:
- Providing excellent, personal service.
- Providing good value for money.
- Quick efficient fulfilment of orders.
- Listening to your customer.
- Keeping your promises.
- Keeping in touch with your customer.
Have a Strategic Plan
A business needs a strategic plan. You are unlikely to succeed if you don’t have a goal and an idea of how to achieve it. Often this goal is simply survival. Work out some risk management measures and understand your core business principles. It is also important to recognise that surviving is a team effort. Communicating honestly with your staff and keeping them informed ensures they feel part of the team.
“Individuals don’t win in business; teams do.” – Sam Walton
What tools can help?
It is fairly obvious from all the points above that having accurate, real-time data and records is an essential factor. This is where an Accounting or ERP software solution can invaluable. It enables staff to function efficiently with information being easily available across all the different areas of the business and with the capturing of data done at a single point. It enables reports and analysis to be extracted and keeps information current.
All the tips mentioned above are interrelated. You cannot give good service if you do not know if you can fulfil an order. You cannot extract Cash Flow Forecasts if you do not know what your commitments are and when and what your customers are expected to pay. Without the ability to extract good sales analysis reports, which uses information from customer and stock transactions, you will not know your market.
“Know your numbers’ is a fundamental precept of business.” – Bill Gates
Omni Accounts is a cost-effective, scalable and fully integrated ERP and Accounting solution with all the features necessary to efficiently manage a business’s resources.
What are barcodes?
Wikipedia defines barcodes as ‘A barcode (also bar code) is an optical, machine-readable, representation of data; the data usually describes something about the object that carries the barcode. Traditional barcodes systematically represent data by varying the widths and spacings of parallel lines. Barcodes are also known as UPC codes.
Barcodes are typically applied to items to enable them to be quickly identified when read by a barcode reader or scanner. The software also enables devices such as smartphones to read barcodes.
Why use Barcodes?
Barcodes speed up the process of manually entering codes into software applications. Barcodes also greatly reduce the error factor that is inherent in any manual capture of data. They provide the ability for greater automation in many areas of commerce and manufacturing. Some of the areas that barcodes are extensively used are in Point of Sale software systems, where they improve speed and accuracy at the till point.
What can Barcodes be used for?
Barcodes are used in an ever-increasing variety of areas in everyday life. Some of the most common uses are:
- On stock items in shops which are scanned at the till.
- On high-value items showing their unique serial number.
- Produced by scales for items sold by weight which are then scanned at tills.
- Tagging assets that businesses own.
- On books, not only to price them but to easily find them
Some other areas where barcodes are used are:
- On baggage labels, helping airlines track luggage.
- In hospitals, for patient identification and information such as allergies etc.
- 2D barcodes (QR Codes) used in printed media, read by smartphones for further information on articles.
- On airline boarding passes.
- On trees, helping to prevent illegal logging.
Types of Barcodes
There are different kinds of barcodes for different purposes and these are called symbologies. These are standards that define the format of the barcode and how the barcode will be read by scanning devices. Some linear barcode symbologies are:
- EAN-13 – Worldwide retail. A 13 digit numerical number with the last being a check digit.
- EAN-8 – An 8 digit number and derived from EAN-13 for smaller items.
- Code 39- An alphanumeric codes, with an optional check digit.
There are also industry standards, for which there may be a few symbologies. Some examples of the standards are:
Barcodes on stock items
Each barcode on a stock item should be unique to that item. In order to control this, barcodes are governed by GS1 which is an organisation that has multiple member organisations globally. These GS1 Barcodes members allocate barcodes to companies and these are usually paid for with an annual subscription.
Implementing Barcodes in your business
There are a few very important questions that initially need to be answered. The answers will define the type of bar code you use and also what devices you will require.
- Are the barcodes on the products you purchase from your supplier?
- Are the barcodes for products you manufacture in order to sell?
- Do you wish to use barcodes for internal codes and stock tracking?
You may have a scenario of more than one of these requirements.
Barcodes on purchased items
If you need to be able to read barcodes on products you purchase, then you will need barcode scanners that handle barcodes for the type of products you are purchasing. In most cases, these will be the EAN-13 type barcodes. You may use barcodes to speed up handling deliveries from your suppliers as well as using them when selling to your customers. You may wish to print shelf teaser labels that contain the items’ barcodes, in which can you will need a printer capable of printing this kind of label.
Barcodes on manufactured products for resale
In this case, you will need to purchase the barcodes from a GS1 member organisation. This will ensure that your barcodes are totally unique. The type of barcode you chose will depend on the type of products that you are manufacturing. You will need barcode printers, to print your labels, taking into consideration the size of the label and environment (for example, does it need to be waterproof). You will also need scanners to read your barcode labels. The most common barcode symbology used is EAN-13.
Barcodes for internal use
If the barcodes are solely for internal use and will not be read outside of your organisation, then you do not need to purchase barcodes from a GS1 member organisation. You can set up your own coding structure and codes and use a symbology such as Code 39. You will need scanners and printers which can read these barcode types.
Barcodes for external and internal use
If you use a combination of barcode symbologies in your business (for example EAN-13 and Code 39), then you must ensure that your scanners can read all the different types of barcode labels. You optimally want to be able to use the same scanners to scan all items. In the same way, you need to be able to print all the different barcode labels.
The type of scanner you require will depend on the environment and the application. Some scanners are not suited to heavy-duty or dirty conditions. The size of the barcode is also a consideration, not all scanners can read very small barcode labels. Scanners are often connected to a keyboard or USB port and there are also scanners for doing stock takes, for example, which are not connected to anything and once all the scanning is completed, the data is uploaded to a computer via a USB connection.
The type of printer will depend on the type of barcode label being printed. Some printers are not capable of printing very small barcode labels that are readable by a scanner. The print quality also needs to be good enough to be read by a scanner. Sometimes special barcode printers must be used, especially if the label has to be weatherproof. In these cases, thermal printers are often recommended. It’s very important to check that the barcode labels you print can be read by your barcode scanners.
Barcodes can improve the efficiency of your business but adequate time needs to be spent considering all the requirements, researching and sourcing the hardware you will require and planning your barcode codes and types. Making hasty ill-informed decisions may end up costing you time and money and compromising the success of the use of barcodes in your business. This article is not intended as an in-depth guide but rather as an overview of what is, a fairly complex subject.
Omni Accounts handles barcodes on stock, allowing the uses of barcode scanning in all areas where stock transactions are processed. The ability to print barcodes is also available, but bear in mind that for certain types of barcodes and printers special fonts may be required.
The Importance of Backups
Making regular backups of information is extremely important. Losing data can have an impact on a business ranging from being merely annoying to catastrophic. Unfortunately setting up a good backup system is so often ignored and often not checked on a regular basis. It is important to remember that just doing a backup is not enough. It is vital that you are backing up the right data and that you make sure that the backup can be restored. It is a false sense of security to have a backup process running, which when disaster strikes, turns out to either contain only part of or worse, none of the vital data, or is damaged or in a format that cannot be recovered. Statistics show that the majority of businesses that suffer major data loss with no recovery options close down.
Why are Backups Necessary?
Data is stored on hardware storage devices. These will inevitably eventually fail or malfunction. Other reasons why you may lose data include ransomware, viruses and malware attacks, corruption due to system failures, power outages, theft, fire, flood and human error, to name just some of the main culprits. The software can normally be reinstalled, data cannot. A recent survey in the USA showed that 49% of CEO’s say becoming a victim of a cyberattack is a case of “when” and not “if”.
Guidelines to good backups
How often you backup data depends on how often the data is updated and how easy it would be to recapture lost data. For example, if you backup your Accounting/ERP data once a week, how easy will it be to recapture everything lost if you have to restore back to data created a week ago? Bear in mind this might not be just financial transactions but also customer, supplier and stock information changes as well. What will the impact on the business be, if this were to happen?
Location of Backup files
It is very important not to store all backup files on the same storage media as the actual live data. If the media fails or one of the other disasters, listed above occurs, then the data, as well as the backup files, may well be lost. A set of backups to an alternate storage media should always be made.
Backup files should always be created in some sort of rotation. If for example you have some sort of file corruption and you always back up over the last backup file, then it is very possible that you will end up overwriting your one good backup file with a backup of the corrupted data. Storage media is becoming more inexpensive all the time. So having a separate backup file for each day of the week, for example, will help mitigate this risk.
It is also a good policy to keep offsite backups. So this means using storage media that is kept at a different physical location. If for example, you are unfortunate enough to have a fire, then your backup files stored at a different physical location may prove a lifesaver.
So essentially you should aim to have backup files stored in more than one location. Enforce the 3-2-1- Rule and have at least three (3) copies of your data with at least two (2) stored on different media.
Types of Backup Storage Media
There are a number of different types available, some of these are:-
- External Hard Drives. These have the advantage of being able to be rotated and easily moved to alternate physical locations.
- USB Flash Drives. These are very portable, but can be easily lost and are not always reliable.
- Tape Drives. These are good for high-speed backup of large data files. The tapes can also be rotated and some kept offsite. A disadvantage is that often the same model of tape drive unit needs to be used to restore the tape backups and the units are often quite costly.
- DVD backups. These are less popular as they have a limited storage capacity and can be unreliable.
- Cloud storage. Backup files are uploaded over the Internet to storage on a remote server. Large backup files may take time to upload so internet bandwidth and speed must be considered. There is usually a monthly cost involved for storage over about 5GB.
- NAS (Network Attached Storage) Device. This is a device that consists of multiple storage drives, and provides a larger storage capacity. The device is connected to a LAN (Local Area Network) for access purposes. These devices can be expensive to set up, but if RAID drive configurations are used, they give fast data transfer rates as well as good protection against drive failure and data redundancy.
Test your Backups
It is important to test the validity of your backups regularly. Think of it like a fire drill. You have all the precautions in place but you need to check that it all works as expected. So have regular practice runs. Don’t restore your backups over your live data but rather to a different location.
This will test a few things:-
- The backup media is readable.
- The correct files are being backed up.
- The backup files can be restored to a different location.
Backups should be scheduled to run automatically. Relying on manually run backups is dangerous. People forget, are away on leave or ill. You never know when you will need your backup files. Backups can be set up using compression archiving tools and batch files and then be scheduled using a tool such as Task Scheduler. There are a variety of software packages that also handle automated backups to a variety of media. You need to evaluate the costs of the various solutions. You may need the advice of an IT Consultant to help you make the best decision. But always bear in mind what the cost of data loss to your business will be if you do not have adequate backups. Think of it as a type of insurance, if disaster strikes you will be thankful you have it.
What is Bookkeeping?
Bookkeeping is the recording of all financial transactions in a business. The information is captured into accounts, called Nominal or General Ledger accounts, which can then be used to manage the business’s financial transactions. The information should normally be captured in chronological order and can be captured in different forms. Old fashioned ledger books may be used or perhaps spreadsheets, but many businesses now use a software package.
What is the difference between Bookkeeping & Accounting?
Bookkeeping is the capturing of all the financial transactions and Accounting is the analysis and interpretation of the captured data and overall financial management. A bookkeeper will gather and enter all the financial transactions into various accounts. This data can then be used to produce financial statements and reports such as an Income Statement and Balance Sheet. This can be done by either an accountant or a bookkeeper. The accountant will then analyse these reports in order to manage the finances of the business. Accounting incorporates and relies on the bookkeeping functions and the two terms are often used synonymously.
What is the Double-Entry system?
Every transaction that is entered into the set of accounts has equal and opposite effects in at least two different accounts. The same amount will be debited to one account and credited to another account. This means that all the debits in the accounts must equal all the credits, which provides a method of ensuring accuracy and eliminating errors. It maintains the accounting equation of Assets = Liabilities + Capital. The type of each account defines whether its balance should normally be a debit or a credit. An example of this is that a change in an Asset (a debit) will result in a corresponding change of the same amount in a Liability (a credit).
The Importance of Bookkeeping
Accurate bookkeeping is critical to all types and sizes of businesses. It keeps track of all the income and expenses of the business showing profitably. It also keeps track of money owed by the business creditors (suppliers) and likewise, money owed to the business by debtors (customers). It is vital to keep track of bank accounts and statutory obligations such as VAT. For any kind of business, all of this information needs to be as up to date as possible, so that the business can be managed to the best advantage and informed decisions can be made. The more up to date the information is, the quicker problems or opportunities can be identified and acted upon.
Bookkeeping also allows the business to fulfil any legal accounting requirements, as well as being able to produce reports when applying for any kind of finance or loan.
Having accurate bookkeeping records means that the performance of the business can be monitored and also allows for forward planning, setting of budgets, and sales targets by analysing the historical data.
What are the functions of Bookkeeping?
The main types of transactions that would be captured by a bookkeeper are:-
• Sales Invoices and Credit Notes
• Supplier Invoices and Credit Notes
• Payments from customers
• Payments to suppliers
• Salary and wage payments
• Loan payments
• Sundry Expense payments.
Bookkeeping and Accounting Software
With the advent of accessible and affordable technology, the manual multiple and handwritten bookkeeping ledgers are mostly a thing of the past. As mentioned, a small business may use Excel spreadsheets but this is open to errors and duplications. A Bookkeeping or Accounting software package will allow the easy capturing of all the business financial transactions and will usually post all the double-entry transactions automatically without much user intervention. Most software packages will easily produce most of the financial statements required as well as providing forecasting and budgeting. So the bookkeeping and a big portion of the accounting functions are handled by the software. This has resulted in the traditional differences between bookkeepers and accountants becoming blurred. A bookkeeper will often produce the financial statements and then give to an accountant to check and advise. On the other hand, an accountant may handle the bookkeeping functions himself.
Omni Accounts handles all the bookkeeping and accounting requirement for a business, be it small or large. It is a fully integrated package, meaning information is entered once into the system and all the relevant accounts are seamlessly updated. All the financial reports are easily extracted with full audit trails and historical data always available. A powerful report writer allows the design of reports to suit a large variety of businesses of different sizes.
How to prepare for a VAT Audit
I don’t know of anyone or any business owners, who don’t experience anxiety, trepidation, fear or all of the above when faced with a VAT audit. Such emotional reactions are understandable because one is invariably wary of “what SARS will find”.
In most cases however the audit inspector from SARS is looking for overall compliance, and in most cases where a SARS inspector uncovers minor incorrect claims, both in respect of input and output VAT, these are simply pointed out to the business undergoing the inspection with the relevant corrective instructions with a pay-in or a refund to follow. Sometimes interest and penalties might also apply. But beware of blatant omissions in order to lower the amount to be submitted. If such a practice is uncovered, SARS will “throw the book at” the offending business.
Do’s and Don’ts
Perhaps before commenting on how to prepare for an actual VAT audit, I will touch on the “DOs & DON’Ts” on an on-going basis, so that one is relatively well prepared for a SARS audit in the event that your business is selected for a SARS VAT audit.
INPUT and OUTPUT VAT
First of all, it is important that the person responsible for posting transactions and preparing the VAT submissions is familiar with the VAT rates and aspects of INPUT and OUTPUT VAT that attract VAT. For example, you cannot claim VAT on “entertainment” expenses, but you can claim VAT on “stationary” purchased for business consumption. And if in doubt, you should seek guidance from your external accounting officer or even directly from SARS.
The next step is to get organised. Know where to find whatever source (original) document you might be required to produce during a VAT audit. So, your document filing must be properly organised and the relevant source documents filed in logical (ascending) order. Make sure that your source (original) documents contain all the relevant information on them as specified by SARS. For example, all your supplier invoices must have your registered trade name on them as well as your VAT number etc. and ensure that the VAT amount is clearly indicated on all invoices, both on customer and supplier invoices. It is often not good enough indicating to the SARS inspector that the relevant invoice was processed correctly. The inspector will want to have sight of the source (original) documents in many cases.
If you are using a computerised accounting software package, which, apart from calculating Input and Output VAT correctly during the normal day to day processing, it should also enable you to produce accurate reports which allow you to complete the relevant VAT (201) form. It should also, be capable of printing detailed reports supporting the various totals required for completion of the VAT (201) form. Your computerised accounting package should also have a “lockdown” facility that locks down and links the relevant transactions that made up the VAT (201) return with historical retrieval so that you can effectively “re-produce” a VAT return with its relevant supporting audit trails. This is important because you would in all probability be required to supply such relevant reports during a VAT audit, and they need to match the VAT (201) returns that have been submitted. Remember, VAT audits can often cover several months, even years, so easy access to accurate historical data is important, because as mentioned, a VAT audit may involve an audit going several years back, so your accounting software package should also have “unlimited” history. In addition, the VAT returns should at all times agree to your VAT control account.
If therefore, you have adopted the correct disciplines such as a logical filing system for all the relevant source (original) documents and you have a computerised accounting system that has the kind of functionality mentioned above, then you ought to be ready for a VAT audit more or less anytime. It is important to note that you will never really know what the VAT inspector is going to want to see and/or reconcile to, and no two VAT audits will be the same.
So the best way to “prepare for a VAT audit” is to ensure that you have all the documentation at hand all the time. Treat each day as is it if is a VAT audit day!!
Omni Accounts offers all the functionality mentioned in this article and more.
What is a Financial Year End?
A financial year, also known as a fiscal year, is the period used by governments for accounting and budget purposes. It is not the same concept as a calendar year which is the one-year period that begins on 1st January and ends on 31st December, based on the commonly used Gregorian calendar. A financial year is often different from the calendar year, with a twelve-month period running from 1st March to 28th (or 29th) February being very common in South Africa. Some companies run a financial year from 1st July to 30th June, which is inherited from the British system. Other companies run their financial year to align with the calendar year.
What is important about a Financial Year?
From a statuary point of view, it forms the period over which a company is taxed. It also is a method of measuring the profitability over a set period and thus provides the ability to compare to previous financial years. This does not mean that measuring progress month on month should be neglected, because if a business is not monitored monthly, then there is a very strong chance that the financial year’s results will be a surprise, and not necessarily a pleasant one.
There are three more major reasons why your financial year, and therefore year-end results, should be accurately represented. The first is your tax liabilities. Your final tax liabilities are based on the final outcome of your financial year’s trading and profit. The second reason is that many lending institutes (banks) require copies of your latest and/or recent Annual Financial Statements (AFS) since the general health of the business has a bearing on the lenders’ risks and exposures. And the third reason is to ensure, according to your latest annual financial statements, that the business is indeed solvent, and if not, then the business could be deemed to be trading recklessly, with the possibility of serious legal consequences. These consequences are outside of the scope of this article, but suffice it to say that every business owner should be very mindful of the possible consequences of trading when in an insolvent state.
What is involved in a Financial Year-end?
The Annual Financial Statements (AFS) reports need to be prepared and extracted and, depending on the type of business, these may then need to be audited or checked by an accountant. Often the accountants assist in preparing the AFS of a business. In order to make sure that the figures in the AFS reports are correct there are certain accounting procedures that need to be undertaken. These are mostly reconciliations and certain year-end adjustments.
Some of these reconciliations involve balancing subsidiary ledgers to Balance Sheet control accounts, such as:
- Customers (Debtors)
- Suppliers (Creditors)
- Bank Accounts
- Stock on hand
- Fixed Assets and their accumulated depreciation
- Shareholders loan accounts
Often after the information has been audited or checked by an accountant, there may be more adjusting entries which will then need to be passed.
At the start of a new financial year, the Income & Expenses accounts will have a zero balance and the Balance Sheet account will all contain the carried forward figure (which includes the accumulated profits or losses) from the previous financial year. Most accounting software packages will handle this automatically as part of their Year End procedure.
All of these reconciliations and preparation of the AFS reports unfortunately take time and usually cannot be concluded before the next trading day, being the first day of the new financial year. In fact, preparing the AFS reports often take several weeks and even months, and, as mentioned, usually require input from the appointed external financial officer.
How can an ERP Accounting Software Solution Help?
Having an Enterprise Resource Planning (ERP) Accounting software system will mean that information from all the different areas of the business are captured on a real-time basis during the course of the financial year and because the system is fully integrated, all the information will automatically update all the necessary accounts so that the bulk of the information is already there for the AFS reports to be extracted. Additionally, making sure that most reconciliations are done on a regular basis during the financial year means that the final reconciliations are fairly painless. There may be some year-end adjustments, such as bad debt write-offs and loan account adjustments but most of the information should already be in the system.
Most accounting software solutions will provide the ability to process in the new financial year while allowing for work to be done on the previous year in order to finalise the AFS reports. The ability to process in a previous year should also be restricted to certain users, for example, the bookkeeper or accountant. Once the year-end process is complete and all adjusting entries have been processed, it is important to be able to ‘lockdown’ the previous financial year. The AFS reports, as drawn up by the auditors or accountants will have hard copies submitted to various statutory bodies (SARS) and lending institutes (Banks). It is important to lock down the prior year in question at this point in order to ensure that the accounting system continues to reflect the same balances (closing and opening) as agreed upon. Failing to do so could result in a mismatch going forward, necessitating unnecessary and costly audit investigations.
Omni Accounts ERP Software offers the ability to process in different financial periods, which is controlled by user permissions. Financial years can be locked down, and changing the dates of the financial year of the business is easily achieved.
Omni Premium Bundle
Omni Accounts is a fully integrated Enterprise Resource Planning (ERP) and Accounting software package, uniquely designed to meet the needs of various sizes and types of businesses, offering solutions from R 15 000.00 to well over R 500 000.00. This functionality is all contained within the same software package. It is just a case of switching on the functionality you require which is achieved by purchasing a new unlock (serial) number. Users are also able to test or try out most of the switches for a period of 28 days before buying. This is Omni Accounts’ unique approach which offers users a genuinely seamless growth path.
The Omni Accounts Premium Bundle is the top end of the seven bundles Omni Accounts offers. A bundle can be best described as a balanced selection of switches (modules and features). Omni Premium has been configured to meet the requirements of well-established businesses which requires complex Accounting and Enterprise Resource Planning (ERP) functionality.
Who should consider Omni Premium for their ERP and Accounting Solution?
If you answer ‘yes’ to any of these questions then you should be looking at the Omni Premium Bundle.
- Do you need more than straight forward accounting functionality such as Income Statements, Balance Sheets, customer/supplier documents and statements and ageing reports, and banking management?
- Are you juggling with spreadsheets trying to get the information you need to run your business?
- Are you running multiple software packages in order to control all the aspects of your business?
Why should you consider Omni Premium?
Omni Premium offers much more functionality than straight forward accounting solutions. The emphasis in Omni Premium is to explode your business analysis, reporting on the efficiency of your business at the “nuts and bolts” level.
What do we mean by measuring efficiency at the “nuts and bolts” level?
Herewith some examples:
In today’s competitive world, it is often no longer good enough to just measure sales (turnover). Typically a business needs to know who is buying what from you, at what price and what margins, from which reps, and under which manager the respective reps fall. Likewise regarding stock (inventory) management. The cost of stock holding is enormous! But the cost of lost sales due to “out of stock” situations is just as, if not more damaging to a business. So managing optimum stock levels is often like walking on a tight rope. Monitoring stock movement, ensuring a business has sufficient stock on hand without being overstocked, requires careful analysis.
The Omni Accounts Premium Bundle with its Enterprise Resource Planning (ERP) functionality enables a business to address scenarios as outlined above and more. Omni Premium comes standard with advanced report writing and multiple extra user-defined fields throughout, thus enabling an Omni user to maximise on analysis and controls.
What are the advantages of multiple extra user-defined fields? In customers, for example, many accounting software packages, offer fields such as rep code, area, credit terms, and even customer category, but what if this is not enough? How would a user cope if they require more, such as “province” as well as area? Or if they have an area manager who manages several reps? Or if they require customer sub-categories, for example, retailers might need to be sub-categorised into small, medium, or large retailers.
Similarly, with stock, some stock modules of other accounting software packages will typically offer several prices and product categories, etc. But what happens if you require subcategories and sub-sub-categories? Or multiple valuation methods, as in average or last cost? Or complex selling price lists? Etc.
What does Omni Premium offer?
Listed below is a summary of the main features but by no means all of them.
- Master records, as well as transactions, come standard with multiple fixed fields as well as multiple user-defined fields which explode exponentially Omni Premium’s data analysis capability.
- A powerful Report Writer which provides comprehensive standard reports which can be very easily manipulated in terms of fields, sorting, grouping, etc. Additionally, an option to produce Pivot style reports with graphs is available. If more complex reports are needed then fully customisable reports can be produced which can be configured by the user or with the help of the Omni Accounts Support Team.
- Unlimited transaction history is kept, which means that it is possible to reproduce any historical report. Extracting historical reports such as Income Statements, Balance Sheets, previous VAT Returns, bank reconciliations, statements, age analysis, stock on hand valuations, customer & supplier documents etc. is simple.
- Processing in multiple periods is available and can be controlled with user permissions. This means that month ends and year ends are a complete non-issue because it is quick and easy to process arrears, corrective, or closing entries into a prior period whilst normal current processing continues uninterrupted.
- Multiple Branches can be set up which allows control of branches in different locations.
- The ability to import Customer documents, such as Sales Orders as well as the import of Purchase Orders is available. Master accounts can also be imported and exported. These features provide the ability to move data in and out of the database, which is necessary if you wish to integrate it into a website, for example.
Omni Premium bundle is the foundation for more Enterprise Resource Planning (ERP) functionality in switches such as:
- Omni Automation, which can provide you with the ability to automate the movement of data in and out of Omni by “silently calling” Omni commands without manual intervention.
- Communications (CRM)
- Job Costing
- Manufacturing – Bill of Materials (BOM)
- Material Requirements Planning (MRP)
- Vehicle loading and scheduling
- Multi warehouses
- Serial and batch number tracking
- Point of Sale (POS) system
Omni Premium, your gateway to a unique and exceptional ERP Accounting software solution.