Building a small business from the ground up comes with a variety of challenges to navigate.
If you are managing your finances manually, there are several important factors to take note of, to ensure you do not fall into the traps that many small business owners have succumbed to in the past.
Here are some top tips for small businesses looking to get tax-ready – as originally discussed in an article by Sage’s Yolandi Esterhuizen (Registered Tax Practitioner & Director: Product Compliance, Sage Africa and Middle East).
Keep a calendar, set deadlines, and keep to them
Many small business owners make the mistake of selecting vague dates to fulfil their tasks.
“I must do this next week” is a common phrase that often results in the task not being completed.
The best way to avoid this is to keep a calendar and set an accurate schedule to track what needs to be done, and when.
For example, you could set Tuesday mornings aside to update your books. This is far more specific than “once a week” and will result in you performing the tasks you need to do.
A calendar is valuable, but only if you reference it.
Many small business owners have a calendar but forget to check it – this may result in missing important tasks and appointments.
Setting yourself automatic reminders on your computer or smartphone ensures you remember to check your calendar, complete the scheduled tasks, and meet deadlines.
This is especially important when it comes to the submission deadlines of tax returns to the South African Revenue Service (SARS) and the relevant payment dates – you do not want to miss a deadline.
One of the worst parts about manually managing your finances is that you will usually have to repeat mundane tasks.
For example, you will need to calculate the deductions and contributions of each of your employees’ salaries.
The best way to work around this is to create a template that does most of the legwork for you, especially if you do not have a payroll system in place that can automatically calculate this.
Rather than performing manual calculations – which are also prone to human error – build a spreadsheet that allows you to enter variables and receive the information you need.
Download the Sage guide
There are a few valuable bits of information available in leading financial software and solutions provider Sage’s tax guide.
Sage’s “Payroll tax pocket guide” provides comprehensive insights into the best way to manage this pressurised environment of knowing the basics of payroll tax principles.
These guides are based on Sage’s experience of working with thousands of businesses over the years.