SARS – EOY

Finding the gap in an established market

Posted on August 22, 2017 by Webmaster

Dirk Coetzee and Associates was born out of the growing need for taxation services specifically catering to the fiduciary industry. About two and a half years ago, when the Tax Administration Act was signed into law and tax services to a deceased estate could thereafter be loaded as a separate claim against the estate, the executor’s office did not have the capacity, time or know-how to deal with the growing fiduciary demand. Lifelong friends, Merwe Moelich and Dirk Coetzee, saw the gap in the market that the legislative change had created and jumped on it, establishing a company in 2014 that specialises in deceased estates, trusts and high net worth individuals.

“About 90% of our clients are from the fiduciary industry, made up of two of South Africa’s big four banks, as well as attorneys on the service provider panels of these banks. The other 10 % is made up of small business clients and individual income tax clients,” says Moelich.

Currently, Dirk Coetzee and Associates is the only tax service provider of its kind in South Africa to have successfully negotiated and established the most weekly appointments with all the South African Revenue Service (SARS) branches in the Western Cape to attend to their clients’ tax matters.

Moelich explains that a normal tax practitioner gets on average a one hour appointment per month at SARS, in which a maximum of 10 cases could be handled. “It was a major challenge to convince SARS that our business could simply not be classified as normal tax practitioners, because we handle such a high volume of cases, and on behalf of corporate executors. After tireless negotiations with the Western Cape Government and SARS for more set appointments, we are now able to handle approximately 400 cases per month. We are also in the process of arranging additional appointments in other provinces to meet the growing demand and workload.

To have found a niche market in the tax services industry is something very rare, says Coetzee. “The core of our work consists of the submission of income tax returns for deceased estates and trusts. All of our systems are implemented to align with the Standard Operating Procedure of SARS. We are also members of The Fiduciary Institute of South Africa (FISA), which helps us to stay abreast of any developments in this industry.

“Any changes to these procedures are communicated to us immediately, and our systems adjusted accordingly,” he adds.

With regards to their marketing and sales recipe, Moelich and Coetzee believe that actions speak louder than words. “From the start, it was established that in our field, the most effective marketing tool would be our service delivery, which includes quick feedback and frequent reporting to our clients. We identified that the administrators from the fiduciary industry were getting little or no feedback on their instructions from their current service providers, and we therefore made it our mission to provide frequent feedback, and reply to any queries within 24 hours.

“We would start with a certain branch of a trust company or attorney, prove ourselves, and then later approach further branches to offer our services. This strategy has proved successful and almost all the growth experienced has been due to positive word of mouth from current clients.”

Merwe Moelich and Dirk Coetzee are finalists in the 2017 Entrepreneur of the Year® competition sponsored by Sanlam and BUSINESS/PARTNERS. For more information on their business, please visit the Dirk Coetzee and Associates website: www.dcoetzee.co.za.

Local entrepreneurs’ ability to save is a catch-22

Posted on July 26, 2017 by Business Partners Limited

Navigating saving methods for your business and personal finances

By Christo Botes

Executive Director, Business Partners Limited

South Africans have always been scrutinised for their ability to save, and with July marking National Savings Month – an initiative by the South African Savings Institute (SASI) which encourages all South Africans to embrace the idea and action of saving – there is a focus on the need to save.

But, given the declining economy and recent statistics the National Credit Regulator which show the total outstanding debt owed by South African consumers has increased by 2.94% to R 1.66 trillion, it emphasises how entrepreneurs, just like any other consumer, are feeling the pinch financially and potentially cutting back. However, at the same time, their livelihood relies on consumer spending for business profit.

This predicament means that an entrepreneur’s ability to save can affect both the bottom line of their business, as well as their own personal finances.

Putting the pressure that entrepreneurs are faced with into perspective is Statistics South Africa’s latest Consumer Price Index (CPI), a measure examining the average prices of consumer goods and services. In May 2017, the CPI rose for the first time in 2017 to 5,4% (from 5,3% in April 2017), and average prices increased by 0,3% (from 102,4% in April to 102,7% in May). While marginal, the price increases of goods and services – ranging from food and beverages, to transport – has a knock-on effect on South African consumers and places additional pressure on already strained budgets, resulting in less consumer spending, and thereby, potentially less business for local businesses.

As the challenge of saving and effectively maintaining cash flow can affect both experienced and inexperienced entrepreneurs, precautionary steps need to be taken.

While entrepreneurs may face different hurdles depending on the life stages of their respective businesses – a veteran entrepreneur may fall victim to bad financial management and overspending, while start-up entrepreneurs run the risk of mismanaging their loan repayments, whether from a financier or their own personal credit cards – the fundamental measures to successfully manage their finances remain the same.

Here are five tips for managing your business finances to avoid an impact on personal savings:

Separate personal and business finances: Entrepreneurs should define their salaries based on what their businesses can afford and not the lifestyle which they wish to maintain. Not only will this be financially beneficial in the long run, but it will also prevent discrepancies when SARS assesses the business as well as the owner’s personal income tax.

Keep up with your debt repayments: It is important to bear in mind that saving hard earned money whilst still in significant debt can lead to further implications as the cost of debt can be more than the interest earned from savings. Repaying debts can therefore be seen as the most important foundation when it comes to saving, as once an entrepreneur is no longer in debt, it is often easier to obtain bond type funding or access an overdraft facility in the case of emergency.

Streamline business processes: In order to minimise unnecessary debt, weigh up the costs incurred versus the productivity produced within the business. This can be done by continually reviewing processes and looking for ways to be as cost effective as possible.

Curb spending: Consider each expense before it is incurred and limit fixed monthly costs to the bare minimum. Another way to curb spending is to not invest in non-income producing assets such as cars, houses, boats and other tools that aren’t essential to the business.

Account for late payments: To minimise late payments, it can be beneficial to offer an early settlement discount to debtors that pay within 30 days. Such a discount usually ranges from 2% to 5%, which can be attractive for regular clients as it adds up to a significant amount over a 12-month period. Alternatively, another option is to make use of a debtors factoring house that can facilitate with invoice discounting for the business, and depending on the quality of debtors, an advance can be made up to 80% of the invoice value per debtor. This is a common form of working capital financing, but can be a very expensive form of funding.

Although the current economic climate is tough, entrepreneurs are renowned for taking whatever means necessary to drive their business forward. I always marvel at the resilience of entrepreneurs and how they innovatively face and conquer challenges. Keep it up, entrepreneurs. You are the heroes of our economy!

2015 Budget encouraging for SMEs

Posted on March 10, 2015 by Webmaster

Unemployment remains the country’s greatest economic and social challenge
Finance Minister Nhlanhla Nene, 2015 Budget Speech

The 2015 State of the Nation address, presented by President Jacob Zuma on 12 February 2015, referenced unlocking the potential of small enterprises, and identified small business as one of Government’s nine strategic priorities to be pursued this year. It was therefore positive to note that the 2015 Budget Speech echoed this sentiment, as the development of small business can drastically reduce the high unemployment rate South Africa currently faces.

Gugu Mjadu, spokesperson for the 2015 Sanlam / Business Partners Entrepreneur of the Year®, says that Government’s commitment to prioritising measures aimed at generating employment is also a positive step for boosting the level of entrepreneurship in South Africa.

She says that the proposed measures in this year’s budget speech, such as tax incentives for employment and investment, support for enterprise development, skills and development and employment programmes, will provide much needed support to local entrepreneurs.

R3.5 billion was allocated towards the new Ministry of Small Business Development for mentoring and training support of small business. “While very rewarding, entrepreneurship is also a tough journey, and entrepreneurs need to be supported in order to grow their businesses to levels at which they can positively contribute to job creation and economic growth, and we believe with the correct mentorship and training, local business can thrive.”

Gugu adds that the mention of the Jobs Fund’s allocation of R4 billion in partnership with the private sector for projects that create employment is encouraging, and hopes that a portion of this will be spent on entrepreneurial ventures with potential for growth. “Access to finance is an issue for many entrepreneurs, and we hope a portion of the allocated funds will continue to be used to support up and coming entrepreneurs and business concepts that have the potential to sustain job creation.”

Further support for entrepreneurs was also provided in the form of SARS establishing a small business desk in its revenue offices to assist small businesses to comply with tax requirements. “We hope that this additional support will lessen the amount of time small businesses spend complying with the various processes and enable entrepreneurs to exercise more effort in developing their business instead.

“Overall, the budget was entrepreneur and small business-friendly, and we hope that Government’s commitment to small business will drive entrepreneurial development with the country,” concludes Gugu.

2013 EOY entrant journey to business success in competitive financial industry

Posted on February 17, 2015 by Webmaster

Jeanie-Harvey-Feb-2015

Many business owners don’t grow up dreaming of becoming an entrepreneur, but grow into the career path later in life. This was the case of Jeanie Harvey, owner of Camelot Business & Financial Solutions, an accounting and tax business which also offers accounting tutoring lessons, and an entrant in the 2013 Sanlam / Business Partners Entrepreneur of the Year® competition.

While working as a financial manager in the franchise industry in 2011, Jeanie was approached by her then CEO’s wife to assist with her accounting service business. Inspired by this experience, Jeanie considered opening a similar business, and soon after began her entrepreneurial journey.

After conducting extensive research and due diligence, she decided to pursue the opportunity and made the leap to start her own business. “I understood that to be successful in this venture, I had to give it 110% of my time and therefore made the decision to resign from my position as a financial manager,” says Jeanie.

As a new entrepreneur she realised that to ensure the new venture’s success, a clear set of objectives and outcomes was vital for her new business, as well as for her own learning and development as a new business owner.

Jeanie took time to carefully draft a business plan, which included her past experience, a list of services she wanted to offer based on her skill set, as well as her potential target market. “This helped me identify my strengths and enabled me to motivate my services to small business owners who were seeking to outsource their payroll functions, bookkeeping, tax, and monthly SARS returns. I also made the decision to register as tax practitioner with SARS and the South African Institute of Tax Practitioners (SAIT).”

Once all the due diligence was completed and plans put in place, Camelot Business & Financial Solutions was established in 2012 with just two clients utilising the business’s accounting services. One short year later, Jeanie extended her service offering to include accounting tutoring lessons to high school and first year university students.

When asked about the some of the entrepreneurial challenges she faced, Jeanie says that starting a new business with very few clients is a challenge in itself, as well as building a name for the business in an established industry. “A new business requires dedication and a lot of hard work, but you must believe in yourself and the product you have to offer – this will ultimately determine your success.”

The challenges are worth the effort, when you love what you do and when you are able to reap the rewards of your hard work and establishing something from nothing, says Jeanie. “Being able to see my accomplishments thus far, how my client base has grown, as well as my growth as an entrepreneur is very rewarding.”

These triumphs, and love for what she does, is also clearly visible when Jeanie shares her clients’ stories of success. “A new client was saddled with significant penalties from SARS, and was at the time very pressured and stressed as a result. I managed to get the penalties revoked and will always remember seeing his immediate relief and experiencing his appreciation for my services.”

While Jeanie has only recently opened her business – the inherent entrepreneurial trait of always seeking new opportunities is clear. In the near future, Camelot Business & Financial Solutions aims to expand the business’ service offering to include training and employment of individuals who share the same passion and dedication.

With a bright future ahead of her, Jeanie encourages fellow entrepreneurs to remain steadfast and not to buckle under that the pressure, and regularly reflect on what you have accomplished thus far. “Be thankful for your accomplishments and always consider new opportunities and possibilities,” she concludes.

Entrepreneurial freedom comes with responsibility

Posted on April 16, 2014 by Business Partners Limited

One of the major reasons why entrepreneurs decide to start their own business is the freedom that this lifestyle offers. They want to take their own decisions and are prepared to take the consequences.

Entrepreneurs are by nature risk takers and they realise that it may culminate in serious or negative results, but they always see the positive and remain forever optimistic. If the decision was the right one, the benefits and results offer a great deal of personal satisfaction and a wonderful sense of achievement.

If entrepreneurs only realised the extent of the risks that they take on a daily basis, they would probably not take these decisions, or be much more cautious or research the matter to a larger extent before making the call. But, a call needs to be made. Unlike in the corporate environment where a team, commissions and task groups of specialist disciplines debate a solution, running your own business means making decisions by yourself. It may be tough, but it is also great, exciting and satisfying. You make the decisions; the buck stops with you. No reporting. No writing of motivations. Complete freedom to do what your gut tells you.

Freedom also comes with responsibility. The decisions taken will influence the position or situation not only for yourself but also others around you. You have to understand how your decisions will affect you, your business, your staff, your clients and also the community.

Entrepreneurs are free to make decisions but are they really free? Not really. You may not have to report to a line manager, but you have other bosses. The most important boss in the life of an entrepreneur is his or her customer. They dictate. If you do not satisfy their needs you have no business, so they are your boss. They call the shots. They have options. They have the money in their pockets and as they say, “the customer is king”. Other bosses are the Government (think of SARS as an example or the laws you need to abide to), your family responsibilities and those who work for you. Your suppliers are also bosses.

Yes, entrepreneurs are the master of their own destiny. They make the decisions. They have the freedom to do what they want and when. But it comes with a great level of responsibility and like all things in life; freedom comes at a price.

Tag: SARS