Following the finance minister’s budget speech in February, the new tax year is in full swing. The start of a new tax year also coincides with the beginning of the financial year for many small businesses. This marks an opportune moment to whip your finances into shape, get your books in order, and streamline the bottlenecks in your admin systems and processes.
Here are a few tips to start the new tax year off on the right foot.
Start at the beginning of the year
The best way to plan for a smooth tax year-end is to plan early and keep on top of all the admin. Ensure each month your accountant has the information needed to reconcile your business accounts as well as to submit statutory returns in a timely manner. You could ask your accountant for a bookkeeping checklist that you can tick off when you hand over your monthly files.
Mark important dates in your calendar
If you’re managing your team, selling to customers, and planning strategy, it’s easy to lose track of the essential admin. It’s helpful to mark down important dates on your calendar – the ones you need to know include the deadlines for filing:
- provisional company income tax
- annual financial statements
- VAT submissions
- monthly, interim, and annual PAYE
Create reminders and a progress chart for the more time-consuming and complex tasks, such as annual financial statements. Ahead of the end of a financial year-end, brief your employees to do everything they can to tighten expenditures, collect purchase orders and invoices, file expenses, and clinch every last order.
Make sure your accounts are up to date each quarter
Every column of figures in your financial accounts should add up correctly and tally with all your invoices, bills, deposits, and bank statements. List sales made before the quarter-end, but not yet paid for, as outstanding debtors. Include the amount, invoice number, and invoice date. If there are any invoices that you suspect may not be paid, write a note of them with a brief explanation.
Ensure your employee data is up to date
The new tax year is a good time to check on basic payroll and HR data hygiene. Double-check that payroll and expenses calculations are correct at ahead of the annual Employers Filing Season (usually 1 April to 31 May each year). You can also send employees a reminder to check their personal details are up to date on your systems, as well as audit your teams’ outstanding expense claims and leave days.
Do some housekeeping
Make sure your files are all in order and your invoices, receipts, and statements are filed and stored neatly where you can easily find them. There are many great tools that can help you scan and organise your paperwork in case SARS ever asks for supporting documentation for expenses you have claimed.
Use cloud accounting software
By moving your business to a cloud accounting solution, you can benefit from having real-time access to your accounts. This allows you to retrieve information from the cloud unaided by your accountants or bookkeepers, allowing them to focus on getting the year-end tasks sorted, while you focus on running your business.
Ensure you’re on top of new laws and regulations
Around the beginning of the new tax year, we usually see government introduce new rules, laws and incentives that may impact your business. Make sure you’re aware of new tax and labour laws that might affect your operations. Examples this year include adjustments to the National Minimum Wage and the tax breaks for businesses that invest in renewables.
Your payroll will be affected by new tax tables and regulations. But if you use a robust cloud payroll solution with local support, it should be automatically updated to run the correct calculations. The software is constantly updated to align with the latest tax laws and tables, so that you don’t need to update your spreadsheet formulas or learn to make new manual calculations every year.
- Motumi Ntshili, Senior Compliance Specialist, Africa & Middle East at Sage
