Category: The New Employer

Happy New Year or Financial Year?

What is a financial year and how is it different from a calendar year and the implications thereof for owners of an entity?


“Compliments of the New season!!!”


A term commonly used by individuals at the beginning of a new year, in a business setting does the new year represent a new financial year?


A calendar year always begins on New Year’s Day (1 January) and ends on the last day of the year (31 December) whereas a fiscal year can start on any day (as per your entity incorporation documents) and end precisely 365 days later. The fiscal year reflects on the financial performance of the entity for the period, it is determined by the owners of the entity and will depend on when the company does business and as such will prepare its financial statements based on transactions taking place between these dates. The financial year for businesses helps to establish consistent accounting practices and tax reporting.


The implications for directors at the end of each fiscal year are to declare and file the annual returns and tax returns to the relevant authorities such as CIPC and SARS in order to retain their active status. Failure to comply with the filing requirements may result in de-registration and penalties/fines and possible imprisonment due to non-compliance.


To conclude, it is important to note that the directors of a company should exercise due care when it comes to the company’s year-end as it will ensure compliance across the board with all the relevant authorities and potential investors.

Client Break-ups?

                              #Entrepreneurship101 - Client break-ups are a thing.

  

  Sometimes in the process of acquiring new business one party or both sells the other dreams or things change along the way and that causes a misunderstanding/conflict between service provider and client. Perhaps the values never aligned at all?


 In our journey, we've had situations where an agreement would be signed and the service put into effect and then "the big conflict" happens. You have the option to fix the relationship (most recommended option - remember the initiation costs of the relationship and all the    system adaptations and learnings absorbed from the process) or, you can end it and call it a day (should the cause of the conflict be significant and unavoidable by both parties).


    With SMEs most of the time, cash and resources are very crucial and limited, should you as the client decide to default on your payment, that could be someone's salary or rent           for the premises putting the entrepreneur under significant pressure; some end up taking  credit to pay operational expenses. The invoice value may be insignificant to you, but it may be the reason an SME's door closes and further contracts the economy. If you can, pay them on time, if you cannot, communicate with them on time. 


  Either way, do right by your business partners. 

Ethics matter in business.