May is a busy tax month - use it to review your company’s financial health
May is a busy tax month – use it to review your company’s financial health
Some business managers still do not know that SARS’ tax year starts on 1 March of the current year and ends on 28 or 29 February the following year. So, they might be surprised at how busy May is in the tax calendar.
“To survive the pandemic, companies must remain laser-focused on their financial health, and their strategy must promote a strong tax position,” says Kantha Naicker, Chairman of the Board at the South African Institute of Professional Accountants (SAIPA).
It is no longer sufficient to blindly thrust this responsibility on their tax practitioner and forget about it. “Your accountant is your strategic business advisor, and this is an opportune time to review your financial position with them,” agrees Ian Ferreira-Massyn, Board member and Chairperson: SAIPA (Southern Region).
What’s in store for May
May kicks off with the usual Pay-As-You-Earn (PAYE) submissions and payments due by the 7th of every month. This is followed by Value-Added Tax (VAT) manual submissions and payments on the 25th. Then, on the 28th, it’s time to pay Excise Duty. Corporate Income Tax (CIT) Provisional Tax payments and VAT electronic submissions and payments are both due by the 31st. On top of that, the final date for your annual Employer Reconciliation Declaration (EMP501) also falls on the 31st.
Each of these, as well as other tax events, can have a material impact on your company’s financial health.
“Don’t just make submissions; poor tax awareness can endanger your cash flow and needs to be reviewed with your accountant as a managed component of your larger business recovery strategy,” says Naicker.
Accountants as business advisors
Consultants tend to specialise in a single domain of expertise, offering both direction and services to achieve an isolated outcome. For example, moving your computer system to the Cloud.
Conversely, advisors operate at a higher level over a longer term, guiding businesses to better performance, greater growth, and bigger market share.
While accountants can and do offer consulting on financial needs, their role is quickly evolving to that of strategic business advisor.
Internally, financial data is a core feature of all segments of the organisation and gives financial officers deeper insight into its operational strengths and weaknesses.
Outside companies, accountants in practice are exposed to a broad range of industries, and the best practices of their top performing clients. They can help their less successful clients implement similar approaches to optimise their own performance.
“In both cases, accountants have a better understanding of businesses and how to improve them than most other management functions,” says Ferreira-Massyn.
Achieving advisory excellence
Realising that excellence in advisory services is rapidly becoming as important as in accountancy, SAIPA launched its Centre of Business Advisory (CoBA).
The Centre acts as a think tank, identifying emerging demands around business advisory and developing standards and continuing professional development (CPD) initiatives to satisfy them.
Because businesses sometimes approach other professions for advice, the Centre is open to SAIPA members and non-members who qualify to join.
“Business advisory is not always a one-person show and SAIPA wants to ensure that companies receive congruent guidance that aligns with their strategy, regardless of the source,” says Naicker.
So why not use this busy tax month as a springboard for developing a better business recovery strategy with the help of your accountant?