Category Archives: Business

Discounts, loyalty awards and warranties: Are you recording them correctly?

A1When you sell a product a discount in the form of a volume discount or an early settlement discount may be given to the customer. Another way of encouraging customers to buy from you is to offer a loyalty award. The selling price of a product can also include a provision for a warranty for after-sales service supplied to the customer. 

Volume discounts

The seller can offer a volume discount on the selling price if a customer buys or orders products in excess of an amount or volume as determined by the seller.

An example of a volume discount would be when the seller offers a 10% discount on the selling price of products sold to the customer if the customer buys products to the value of more than R10 000. Alternatively, a discount of 10% may be offered if the customer buys more than 50 units of a certain product.

The amount of a volume discount will be recorded as a reduction in the selling price paid by the customer, thus decreasing revenue in the seller’s books.

Early settlement discounts

An early settlement discount is offered by the seller to customers to encourage them to settle their accounts in a shorter time period than the normal credit terms.

For example, the seller offers customers a discount of 5% if a customer settles their account within 30 days from date of statement instead of the normal credit terms of 60 days.

The seller will record the amount of the early settlement discount as a reduction in the selling price paid by the customer. Once again, the amount of the early settlement discount will reduce revenue in the seller’s books.

Loyalty awards

A loyalty award may be granted to customers in terms of which a customer earns a certain amount of loyalty points based on the amount they spend. The loyalty points can be converted to a Rand value and used by the customer towards paying for products/services in the future.

An example would be where a customer earns one point for each R10 spent on the seller’s products. After the customer earned 500 points, the points are converted to Rands at a rate of 20 cents per point. The loyalty award will come to an amount of R10 (500/10 x 0,20). The customer can then use the loyalty award of R10 towards payment of a next purchase from the seller.

The fair value of the consideration of a transaction subject to a loyalty award must be proportionately allocated between the award credits and the balance of the other components of the sale. The portion of the fair value allocated to the award credits are deferred until the seller fulfils its obligation to supply the loyalty credits. The seller will fulfil this obligation when the customer redeems the loyalty credits.


The seller may include an amount as warranty for after-sales service to the customer as part of the sales transaction.

For example, included in the selling price of R5 000 for a lawnmower is an amount of R150 for a standard service six months after purchase date. The seller must defer the portion of the selling price related to the warranty. The deferred amount will be recognised as revenue during the financial period in which the seller fulfils its warranty obligation.

The examples discussed in this article are simple as each example only involves one of the four topics above. In practice, transactions can become much more complicated as a transaction may be subject to two or more of the above terms of payment, in any combination.

If you would like more information about this topic, please contact us for professional assistance and advice.

This article is a general information sheet and should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. 

Reference List:

  • IFRS for SMEs by IASB
  • Training Material for the IFRS for SMEs by the IFRS Foundation
  • IFRS for SMEs – A summary by W Consulting and SAICA

To sign or not to sign: Handwritten versus electronic signatures

A3We all know that a handwritten signature is legally binding on the party who made the signature. But what about an electronic signature? What is an electronic signature? Will a document be legally binding if signed electronically and not by hand? How easy is it to forge an electronic signature? Why should one consider using an electronic signature? 

What is an Electronic Signature or e-signature?

An e-signature is not an image of a scanned signature which is copied and pasted into a typed document.

E-signatures can be divided into three categories, being Digital Signatures, Digital Certificates and Advanced Electronic Signatures (AESs). All three of these types of signatures are very reliable. The requirements of your business will determine which one of the three to use. The rest of the article will convey information regarding AESs as they are the category of e-signatures recognised by South African Law whenever a signature is required. 

What are the benefits of using AESs?

Making a move to AESs can let things flow faster and smoother in your business while saving you time and money, and even the auditors will be happy because AESs leave an audit trail they can follow.

Once a business starts using AESs, there are certain costs which will be significantly reduced. Some of these costs are:

  • Printing expenses – the business as a whole will use less paper and ink.
  • Courier and postage – documents can be sent electronically via email.
  • Archiving and searching costs – documents can be stored in electronic format and searches can be done electronically when looking for a specific document, instead of filing and paging through piles of paper.

Shorter time delays in certain business processes (e.g. approving quotes for customers) can improve efficiency. AESs are significantly more secure than handwritten signatures due to them being almost impossible to forge, even with the help of powerful computers. The only circumstances where an AES is easily forgeable, is when the signer gives his/her private key out to someone. And finally, adopting AESs will result in your business being more environmentally friendly by saving paper and thus trees and other resources which are in limited supply. 

Why should I trust an AES instead of a handwritten signature?

Even when you are presented with an original document signed by hand, you can’t be 100% sure that it was actually signed by the right person or that the document hasn’t been tampered with, as a handwritten signature can be forged relatively easily. In contrast, AESs require that an accredited authority verify the signer’s identity in person before providing the signer with signing tools.

The electronic signing of a document involves two electronic keys: a private key and a public key. The private key is only known to the signer of the document and the recipient who wants to authenticate the signature. The recipient uses both the public and the private keys to confirm the identity of the signer and that the document was not altered in any way during the transmission process. 

Electronic Signatures and the Law

The laws of different countries have different requirements regarding the use of electronic signatures, which will influence which category of e-signature you will choose to use. AESs are recognised by South African Law as a reliable and valid form of signing legally binding documents for more than a decade already.

The biggest benefit of AESs is its low risk of forging and tampering with a document signed by an AES. Despite the fact that AESs offer better protection to users of documents than traditional handwritten signatures, and that the Law already recognises the validity of AESs, there are still those who are resistant to change. Resistance is often the result of ignorance and education about the benefits of AESs will go a long way to increase acceptance of this safer, cheaper and more convenient way of conducting business.

If you would like more information about this topic, feel free to contact us for professional assistance and advice. 

This article is a general information sheet and should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. 

Reference List:

Red flags (Part 2): Non-financial reasons why small businesses fail

A3Small businesses usually fail due to a combination of financial and non-financial reasons. The good news is that these risks can be addressed before they become a threat to the survival of the business. This article will discuss a number of non-financial risk factors that could lead to small business failure if not addressed in time.

  • Lack of planning 

Business plan:

Few small businesses have business plans or if there is  one, it often ends up forgotten in a bottom drawer. To be of any real value, a business plan needs to be flexible and reviewed occasionally to determine if the business is still moving in the direction that the owner originally planned or if a change in direction is required.

Succession plan:

An up-to-date succession plan is vital to ensure that the business can continue if something unexpected happens e.g. losing a key employee.

  • Marketing considerations 

Target market:

It is crucial to define a target market to ensure that advertising is done through the right channels to reach the target market. The owner/management must stay in touch with changes in the needs and wants of their target market. Every now and then the business should re-assess whether the demand for their product or service is growing, declining or stagnating, and whether their target market has perhaps changed. 

Customer base:

The risk of having one big customer is that losing them might mean closing down the business. Having a large base of small customers in addition to one big customer is much safer. 

Focus on products:

Effort should be focused on marketing the most profitable products or services. This means information on how much profit is made on each transaction should be available. 

Advertising channels:

Today every business probably should have a website and use the same social media platforms e.g. Twitter or Facebook, that their target market uses. If not, you will lose clients to your competition who does make use of these resources. 


One business can’t be/do everything for every customer. Spreading yourself too thin can diminish the quality of service delivery.

  • Inadequate management skills and experience

Lack of management skills, experience and knowledge of the business sector in which a business operates is a major cause of small business failure. If not addressed in time, poor communication skills and lack of adequate procedures and systems will be a factor that increases the chances of business failure.

  • Unexpected and uncontrolled growth

A growing business can expand beyond the management resources and skills available in the business. If a current employee’s ability to manage and plan becomes insufficient due to the growth of your business, re-training the employee so that he/she is able to meet the changing demands of their work, or appointing a more qualified person should be considered.

  • Incompetent personnel and poor service delivery

Repeat and referral business is where the big money lies. Customers who had a bad experience in dealing with your business, will probably not return and tell other potential customers about their negative experience.

Develop strict guidelines when hiring personnel and put new and old personnel through intensive training to ensure quality service delivery from each employee. The success of a business depends to a large extent on the owner’s attitude, ability to be objective and willingness to bring in help when needed.

If the above content raised any concerns you wish to discuss or need professional guidance on, please do not hesitate to contact any accounting office.

This article is a general information sheet and should not be used or relied on as professional advice. No liability can be accepted for any errors or ommissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial advisor for specific and detailed advice. 

Reference List:

Red flags: Financial reasons why small businesses fail

A2Many people dream of starting their own business. Few of the dreamers get as far as actually starting a business. Even fewer of the businesses survive in the long-term. Too often small businesses fail due to reasons, financial and otherwise, that could have been managed or altogether avoided. Continue reading to see if you recognise any of these red flags in your business. 

Lack of financial skills, financial planning and financial management

Have you done any financial forecasts for your business? Never?

Do you control spending with a budget?

Do you know how much income (revenue) and profit (no, they are not the same thing) you are making on each transaction? Are you focused on the products that generate the most profit?

Are you aware of the cycles (e.g. seasonal cycles) in the business sector you operate in and do you plan your cash flow according to the effect these cycles will have on your income and expenses?

If you answered “No” to any of the above questions, that could be a red flag popping up. 

Not enough cash reserves/savings

The minute any business starts to struggle with cash flow, a red flag immediately goes up because no cash means no business.

Something bad or unforeseen is bound to happen to your business from time to time – that’s life. The question is, when it happens, is there enough cash available to recover from the setback or challenge? No? There’s that red flag popping up again.

Some other sources of potential cash flow problems worth looking into are:

  • Falling behind on payments of day-to-day expenses e.g. suppliers, rent.
  • Borrowing money without a realistic plan or the means of repaying it.
  • Paying suppliers COD but selling to clients on credit. Does your business have enough cash reserves to pay suppliers immediately and wait for payment from your clients for possibly more than a month? Ideally the business should be able to pay suppliers on time and coordinate these payments with cash inflows from clients.
  • Uncontrolled personal use of business money – in other words: raiding the business’s cash register whenever you need money for private purposes.

Poor accounting

You can’t control and manage your business if you don’t know what’s going on with the finances. Business decisions need to be based on accurate, up-to-date financial information otherwise you are flying your business blindfolded. Remember: you can’t manage what you can’t measure. 

Lack of awareness of the relationship between different functions of a business

Consider the following statement: Without money there is no business and without business there is no money. Or to put it differently: If you neglect sales, there will be no money flowing into the business and if you neglect managing the money, you will not be able to pay for the products or services you need to generate sales.

There is a fairy tale idea that an established business will just run itself. If there were any truth to this idea, there would have been a lot less small businesses going out of business or failing for various reasons. If you want to ensure that your small business will thrive now and in the future, there are certain things you have to do. It is never too late to start doing cash flow planning or draw up a budget. Remember that even a mature plant needs to be watered so keep those forecasts rolling!

If the above article raised any questions in your mind or you need professional guidance on this topic, please do not hesitate to contact a business consultant who can assist you in the planning of your business. 

This article is a general information sheet and should not be used or relied on as professional advice. No liability can be accepted for any errors or ommissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. 


10 Wenke hoe om uitgawes dop te hou

A4Hou jy behoorlik boek van jou klein onderneming se besigheidsuitgawes (operasionele koste)? Dit sal onnodige koste besnoei en jou meer voorbereid vir belastingtyd maak as jy jou uitgawes gereeld aanteken en aanpassings maak.

Probeer hierdie wenke om jou besigheidsuitgawes beter te bestuur:

  1. Gebruik sagteware. Rekeningkundige sagteware soos Quickbooks en sigblaaie van MS Office maak bestuur van uitgawes makliker. Kies dieselfde program as jou boekhouer of ‘n versoenbare een; sodoende kan jy inligting direk na jou belastingopgawe oordra.
  1. Wees gereed vir belastingtyd. Wees noukeurig wanneer jy aftrekbare uitgawes soos voertuiggebruik vir besigheidsdoeleindes, reis- en onthaalkoste, voorraad en toerusting, en bydraes aan verenigings en liefdadigheidsorganisasies aanteken. Die SAID-webtuiste voorsien  details oor hierdie uitgawes.
  1. Hou persoonlike en besigheidsrekeninge apart. Moenie persoonlike kontant, kredietkaarte of tjeks vir besigheidsuitgawes aanwend nie. Maak seker jy debiteer die korrekte rekening wanneer jy jouself of werknemers vergoed, om verwarring en navrae van SAID te vermy.
  1. Stadig met die kontant. Betalings uit die kleinkas moet beperk word – skep eerder ‘n kleinkas-rekening in jou boekhouding om effektief hiervan boek te hou.
  1. Bewaar alle kwitansies. In geval van ‘n oudit gaan jy alle kwitansies benodig om jou eise te staaf. Skryf dus die doel van die uitgawe op elke kwitansie, en neem foto’s daarvan of skandeer dit in die rekenaar in om bergplek te spaar en moeite te verminder.
  1. Teken inligting dadelik aan. Teken uitgawes dadelik aan sodat dit nie ophoop nie en jy in beheer van die boekhouding bly.
  1. Gee jouself krediet. Kredietkaarte maak dit makliker om tred te hou met jou besigheidsuitgawes, aangesien die state besonderhede van jou uitgawes volledig uiteensit. Kredietkaarte is ook veiliger en geriefliker om te gebruik as kontant.
  1. Gebruik tegnologie. Sekere draagbare toepassings stel jou in staat om jou uitgawes dop te hou en na die korrekte kliënt of rekening te allokeer. Kry produkte wat versoenbaar is met jou bestaande rekeningkundige sagteware.
  1. Monitor resultate. Skep weeklikse en maandelikse terugvoering met jou rekeningkundige sagteware om jou inkomste en uitgawe te monitor. Gebruik ‘n maandelikse, kwartaallikse en jaarlikse begroting gebaseer op spandering in die verlede om jou uitgawes met jou begroting te laat klop.
  1. Sny oortollige uitgawes. Spandeer jy meer as wat jou begroting toelaat? Wil jy ‘n groter wins maak? Analiseer jou uitgawes en begin deur die onnodige uitgawes te sny.

Hierdie artikel is ‘n algemene inligtingstuk en moet nie gebruik of staatgemaak word op as professionele advies nie. Geen aanspreeklikheid kan aanvaar word vir enige foute of weglatings of vir enige verlies of skade wat voortspruit uit vertroue op enige inligting hierin nie. Kontak altyd jou finansiële adviseur vir spesifieke en gedetailleerde advies.

Neem jou onderneming na die volgende vlak

A2Jou onderneming sal stagneer as jy die status quo wil handhaaf. Jy kan nie maar net doen wat jy altyd gedoen het nie. Neem as voorbeeld die voormalige fliek-uitlenersreus Blockbusters. Selfs sy bekendheid en markdominering was nie genoeg om dit te red toe ander maatskappye op kritieke veranderings in die mark gereageer het en Blockbusters nie.

Bestudeer die volgende stappe om te verseker dat jou besigheidstrategie gedurig ontwikkel om groei te stimuleer. 

Stap Een: Kultiveer kreatiwiteit

Elke besigheid moet iets nuuts skep om in die wedloop te bly. Kultiveer kreatiwiteit in jou maatskappy. Bring diverse werknemers met diverse idees bymekaar en moedig hulle aan om ‘n dinkskrum te hou oor huidige tendense en ontwikkelinge, met inagneming van die behoeftes van die verbruikers. Daag hulle uit met nuwe projekte wat hul denke sal stimuleer tot briljante, innoverende nuwe idees.   

Stap Twee: Optimaliseer samewerking

Spanwerk laat jou maatskappy funksioneer. ‘n Goeie span is meer as die som van al die individue; dit is meer kreatief, meer effektief en meer produktief. Elke lid se swak en sterk punte bring die beste in die ander uit, sodat elkeen ‘n uiteenlopende en spesiale bydrae kan lewer.

Stap Drie: Neem risiko’s

Sodra jy stappe geneem het om jou maatskappy meer kreatief en innoverend te maak, moet jy uit jou gemaksone tree en hierdie nuwe idees beproef. Moenie dat besware en negatiewe opmerkings jou van stryk bring nie – ‘n dapper hart is van kritieke belang as jy jou besigheid wil laat groei. Weet wat die aanvaarbare vlak van verlies sal wees as dit misluk, rol jou moue op en doen dit eenvoudig. 

Stap Vier: Aanvaar mislukking

Nie alles wat jy probeer, gaan suksesvol wees nie. Moet dit nooit van jouself, jou werknemers of jou maatskappy verwag nie. Hanteer die mislukkings as leerervarings en dissekteer dit om vas te stel waar jy kan verbeter. Om risiko’s te neem, is om soms te misluk, maar jy wil tog nie net oorleef nie – jy wil floreer! Verwag van jouself en jou werknemers om na ‘n mislukking op te staan, weer te probeer en vorentoe te kyk. Verbeter wat jy kan, probeer iets nuuts en hou aan – jou volgende inisiatief mag dalk jou groot deurbraak wees! 

Stap Vyf: Prioretiseer vir sukses

Tyd is kosbaar, so moenie tyd mors op onbeduidende projekte wat jou vordering met belangrike sake vertraag nie. Kies die projekte wat die sukses van jou maatskappy gaan bepaal en spandeer dan jou tyd daaraan. Jy kan nie vir alles “ja” sê nie, so prioretiseer. Die wêreld verander so vinnig dat jy moet seker maak jy fokus al jou pogings op die belangrike dinge. Dit is hoe jou besigheid op die voorpunt gaan beland – en daar gaan bly.

Hierdie artikel is ‘n algemene inligtingstuk en moet nie gebruik of staatgemaak word op as professionele advies nie. Geen aanspreeklikheid kan aanvaar word vir enige foute of weglatings of vir enige verlies of skade wat voortspruit uit vertroue op enige inligting hierin nie. Kontak altyd jou finansiële adviseur vir spesifieke en gedetailleerde advies.

Waarom my besigheid waardeer?

A2Besigheidwaardasie is ‘n area in die rekeningkunde wat toenemend aandag geniet in die klein- tot mediumbesigheidsektor. Groter kompetisie vir markaandeel, wat kan lei tot potensiële samesmeltings en oornames, strenger wetgewing met betrekking tot BBBEE  asook ‘n groter fokus op opvolgbeplanning en versekeringsbestuur, is maar net enkele redes hiervoor.

Die waardasieproses geskied hoofsaaklik op een van twee maniere, naamlik op grond van bates of op grond van verdienste. Die waardasiemetode sal afhang van die doel waarvoor die waardasie gedoen word en die verdere aanwending daarvan.

Die meer algemene van die twee benaderings is verdienste, waarbinne ‘n paar filosofieë vervat word.  Aangesien verdienste grootliks met toekomstige gebeure verband hou word besigheidswaardasie op hierdie grondslag as ‘n kuns beskryf en val dit buite die streng maatreëls wat algemene rekeningkunde kenmerk. Dit skep nietemin die geleentheid vir die toevoeging van groot waarde met betrekking tot besigheidsontwikkeling en -intelligensie en kan die bron wees van veel insig in die vooruitsigte van ‘n onderneming.

Indien u dus oorweeg om u besigheid te laat waardeer, of dit nou in reaksie is op gebeure wat in u besigheidskonteks ‘n invloed mag hê, met die oog op toekomsbeplanning, of bloot net om meer insig in u besigheid te verkry, nooi ons u vriendelik uit om met Mnr Johan la Grange ( ‘n afspraak te maak sodat ons u spesifieke situasie, asook die rol wat ons moontlik kan speel in die uitbou van u onderneming, kan bespreek.

Hierdie is ‘n algemene inligtingstuk en moet gevolglik nie as regs- of ander professionele advies benut word nie. Geen aanspreeklikheid kan aanvaar word vir enige foute of weglatings of enige skade of verlies wat volg uit die gebruik van enige inligting hierin vervat nie. Kontak altyd u regsadviseur vir spesifieke en toegepaste advies.