Archive for the 'Financial management' Category

The effect of the new Companies Act on the financial management of your company

Calculating savingsWhen the new Companies Act 71 of 2008 (“the Act”) came into effect on 1 May 2011, it placed an administrative burden on the financial management of a company, especially on the smaller, owner-managed companies that, in the course of their business operations in the past, granted loans to related entities and paid directors’ remuneration without too much trouble.  The Act restricts this in a manner and now requires much more paperwork to be in place before certain actions can be performed.

You will note, from the discussion that follows, that in terms of Section 4 of the Act, the performance of a solvency and liquidity test is often required although this was not the case in the past.

The solvency and liquidity test

A company satisfies the solvency and liquidity test when, taking into consideration all reasonably foreseeable financial circumstances of the company, and based on the accounting records and financial statements:

  • the assets of the company, fairly valued, equal or exceed the liabilities of the company, as fairly valued; and
  • it appears that the company will be able to pay its debts as they become due in the ordinary course of the business, for a period of 12 months following the date on which the test is carried out.

Now, when performing the tasks detailed below, financial managers and directors should take reasonable care and make sure that they adhere to the provisions of the Act, in order to prevent incurring personal liability.

1. Declaration of dividends to shareholders 

Section 46 of the Act deals with the declaration of dividends[1] to the shareholders of a company, and determines that no dividend may be declared unless:

  • it reasonably appears that the company will satisfy the solvency and liquidity test immediately after finalizing the proposed distribution, as in terms of Section 4 of the Act;
  • the board of the company has acknowledged that it has applied the solvency and liquidity test, and reasonably concluded that the company will satisfy the solvency and liquidity test immediately after completing payment of the dividend; and
  • the board of the company has authorised the payment of the dividend by signing a resolution to that effect.

In the event that the correct procedures have not been followed, the financial manager, as a prescribed officer of the company, as well as the directors of the company who participated in making the decision that a dividend should be declared, can be held personally liable for any losses incurred as a consequence of their breach of fiduciary duty regarding the matters of the company.

2. Providing financial assistance to related persons or entities

Financial assistance is defined in Section 1 of the Act as lending money, guaranteeing a loan or other obligation, or securing any debt or obligation by the company, but does not include the lending of money in the ordinary course of business by a company whose primary business is operating in the loan industry.

According to Section  45 of the Act, financial assistance may not be provided to any director, prescribed officer, related or inter-related company, corporation or trust, unless:

  • the shareholders, by way of a special resolution adopted within the previous two years, authorise the approval of financial assistance, either to the specific recipient, or generally for a category of potential recipients;
  • the board is satisfied that the company will satisfy the solvency and liquidity test immediately after providing the financial assistance;
  • the board is satisfied that the terms under which the financial assistance is proposed, are fair and reasonable to the company;
  • the board is satisfied that any conditions or restrictions as set out in the company’s Memorandum of Incorporation, have been adhered to; and
  • the board subsequently adopts a resolution giving effect to the financial assistance, and provides written notice of such resolution to all the shareholders and to any trade union representing the company’s employees.

Any agreement with respect to the provision of any such assistance (i.e. loan agreements) is void to the extent that the provisions of section 45 have not been met.  Directors will incur personal liability for any losses sustained as a consequence of their breach of fiduciary duty.

3. The payment of directors’ remuneration

The payment of directors’ remuneration is also regulated by the Act, in terms of Sections 66(8) and 66(9).

Section 66(8) provides for the payment of remuneration to directors, to the extent that the company’s Memorandum of Incorporation does not provide otherwise.

The Act goes further, and imposes the condition in Section 66(9) that no remuneration may be paid to directors unless a special resolution approving the remuneration payable to the directors, has been passed and approved by the shareholders within the previous two years.

You will agree that these provisions are often just another statutory burden placed on the management of companies, especially the smaller, owner-managed companies.  But the effects of non-compliance may be severe!

Should you require assistance in the preparation of any of the solvency and liquidity tests or the adoption of certain resolutions, please do not hesitate to contact Joanie Viviers at our office at (021) 840 1600 or joanie@asl.co.za .    


[1] Section 46’s scope is wider than just the declaration of dividends and will be applicable to all distributions made by the company.  Distributions are not discussed in detail in this article.

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Deadline: 30 June 2013

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Employers are reminded to submit their Workplace Skills Plan (WSP) and Annual Training Report (ATR) to their respective SETAs no later than 30 June 2013 to qualify for the relevant benefits.

Contact your Skillls Development Facilitator, alternatively Jana Burger of our office at hr@asl.co.za  for more details.

Compensation fund – rather safe than sorry!

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Over the last few years we have placed much emphasis on ensuring that our clients are registered with the Compensation Fund in terms of the Compensation for Occupational Injuries and Diseases Act (COIDA), previously known as the Workmen’s Compensation Act.

We find, however, that there are still many unanswered questions, which form the basis for this article. We trust that the content will address whatever questions you might still have with regard to your registration and annual submission.

What is the Compensation Fund?

The Compensation Fund is a government institution that was established to compensate employees for disablement caused by injuries sustained or diseases contracted in the course of their employment, or death resulting from such injuries and diseases. In such cases, the fund provides the necessary compensation to the employee and thus employers do not need to worry about expensive legal claims.

Who needs to register?

In terms of labour law a business is liable to register with the Compensation Commissioner within seven days after its first employee is appointed. Even if you are a sole proprietor, you remain liable to register in terms of the relevant legislation.

What if I am not registered?

Failure to register constitutes a contravention of the relevant legislation and as a result the business might face serious fines and possible prosecution for non-compliance.

For a company especially, such failure to register will be considered as a breach of the directors’ fiduciary duty towards that company and, as a result, might lead to personal liability of such directors in the case of employees’ claims.

What types of compensation payments are made by the fund?

The fund pays five main types of compensation, i.e:
a) Temporary disability;
b) Permanent disability;
c) Death;
d) Medical expenses; and
e) Additional compensation

  • Temporary disability: This is compensation paid in instances where the employee’s health will improve and he/she will return to work in the future. For the first three months during which an employee is not fit for duty the employer has to remunerate the employee as usual, whereafter the Compensation Fund will continue payment of the monthly benefit and reimburse the employer for compensation paid during the first three months.Temporary disability is equal to 75% of the normal monthly earnings in the case of total disability. In the case of only partial disability such compensation is calculated by alternative means.
  • Permanent disability: This is compensation paid when an employee never recovers from the injury or illness.The compensation is based on the degree of disability and is paid as either a lump sum or a monthly pension. Where the disability is more that 30%, a monthly pension is paid whereas in the case of a disability of less than 30%, a lump sum is payable.
  • Death benefits: This is compensation claimed by the widow/er or dependants if a worker dies as a result of a work-related accident or disease. The compensation is paid to the respective parties as follows:The widow/er:
    a. Lump sum payment: 2 x monthly pension;
    b. Monthly pension for life equal to 40% x monthly pension of the worker.Each child under 18 years:
    20% x monthly pension of the worker, paid every month until such child reaches the age of 18 years.Other dependants:
    Full dependants: Compensation the same as for the widow/er.
    Partial dependants: Lump sum according to the degree of dependence.
    Funeral expenses will be paid up to R 6 970.
  • Medical expenses: All medical expenses will be paid for a maximum of two years from the date of the accident.
  • Additional compensation: If an employee is injured, dies, or contracts an occupational disease because of the negligence of the employer or because of a defect in machinery or equipment, the worker will receive additional compensation for temporary or permanent disability.

Any worker younger than 26 will receive additional compensation.

We urge clients to make sure that they are registered and that annual assessment payments are made when they fall due.

For any assistance with your registration or completion of your annual submission, please do not hesitate to contact our salary bureau administrator, Corne Moss, at salaries@asl.co.za

Submission of annual returns and financial statements

Directors of companies and members of close corporations are required to submit their entity’s annual return to the CIPC. We undertake this task on behalf of many of our clients.

Fairly recently the CIPC implemented a new system according to which they remind entities by email to submit their annual returns. These emails are sent directly to the director/member of the entity. Therefore, should you as our client receive such an email and have any uncertainty about how to handle it you are welcome to send it to us for attention.

In terms of a notice of the CIPC issued on 6 July 2011, titled “Submittance of Annual Returns” the submission of annual returns (except for those of public and state-owned companies) was waived until 31 March 2013. This means that as from 1 April 2013 all entities must submit their financial statements together with their annual returns. The amended procedure may affect the costs that we have to recover for this service and we will shortly communicate with you in this regard.

If you have any queries about the submission of annual returns, or if we can be of assistance with this, you are welcome to contact Marisa Viljoen (ar@asl.co.za) at our office.

Let our payroll service ease your burden

In the experience of most employers, proper and efficient payroll administration is an activity that often does not receive adequate attention and makes heavy calls on the time of valuable human resources. For this reason Aucamp Scholtz Lubbe has for several years been operating a salary bureau which aims to relieve employers of this burden and give them peace of mind by providing an all-inclusive payroll service.

This service, which is accurate, punctual and confidential and can be tailored to suit your particular needs, includes the following:

  • Weekly or monthly processing of salaries and wages in accordance with applicable tax requirements, taking into account all allowances, contributions and deductions;
  • Printing and issuing of salary advices and registers which adhere to legal requirements;
  • Issuing of employee tax certificates (IRP5s);
  • Annual and bi-annual reconciliations of earnings and employees’ tax deducted, as required by the South African Revenue Service; and
  • Providing advice on unemployment insurance.

Payroll administration is not a core function of any business. You should be able to focus your attention and that of your staff on the purposes for which your business was established and not worry about whether the payroll will be on time.

Let us assist you to achieve this by taking over the burden of your payroll administration. The cost is relatively small and you will be joining some very satisfied clients.

For more information or to obtain a quotation for this service, contact the director responsible for your affairs, or Jaco van Straaten.

UIF contributions: Income threshold increased

It is brought to the attention of clients that the prescribed maximum remuneration in respect of  UIF contributions has been increased with effect from 1 October 2012, as reflected in the following table:

  •     R 149 736 to R178 464 per annum, or
  •     R 12 478 to R 14 872 per month, or
  •     R 5 759,08 to R 6 864 bimonthly, or
  •     R 2 879,53 to R 3 432 per week.

Note that these adjustments do not affect the employee and employer contributions to the UIF.

Please ensure that this calculation is changed in your salary system as from October 2012.

You are welcome to contact Corne Moss at (021) 840 1600 or corne@asl.co.za if we can assist you in this regard.

Department of Labour on the lookout

The Department of Labour is intensifying its efforts to monitor employers’ compliance with legal requirements. Inspectors of the Department are increasingly visiting employers in different sectors and asking pertinent questions to ascertain whether employers are fulfilling their obligations towards the Department.

Employers must therefore make sure that their affairs are in order as far as their relationship with the Department is concerned.

It appears that the spotlight is mostly turned on matters such as:

·    PAYE and UIF registration numbers with SARS – Proof of payments;
·    UIF registration numbers with the Department of Labour – Proof of last UI19 Certificate submitted;
·    Compensation Commissioner registration number with the Department of Labour – Proof of last WAs 8 return submitted and proof of payment in     respect of last  WAs 6 return;
·    Name of Health and Safety Representative; and
·    Employment Equity Plan, if applicable.

Prevention is better than cure. Avoid penalties. Be prepared to see the Department of Labour’s inspector if he/she approaches your business for information.

You are welcome to contact Jana Burger (janab@asl.co.za) or Corne Moss (corne@asl.co.za) at (021) 840 1600 if you wish to ensure that you comply with the relevant requirements.

Departement van Arbeid op die loer

Die Departement van Arbeid wend verskerpte pogings aan om werkgewers se nakoming van wetsvereistes te monitor. Inspekteurs van die Departement besoek in toenemende mate werkgewers in verskillende sektore en vra pertinente vrae om hul te vergewis van die mate waarin werkgewers hul verpligtinge teenoor die Departement nakom.

Dit is derhalwe noodsaaklik dat werkgewers seker moet maak dat hul sake wat hul verhouding met die Departement betref, in orde is.

Dit blyk dat die sake wat meesal onder die soeklig kom die volgende is:

·    LBS- en WVF-registrasienommers by die Suid-Afrikaanse Inkomstediens – Bewys van betalings;
·    WVF-registrasienommers by die Departement van Arbeid – Bewys van laaste UI19 Sertifikaat ingedien;
·    Vergoedingskommissaris-registrasienommer by die Departement van Arbeid – Bewys van laaste WAs 8 opgawe ingedien en bewys van betaling t.o.v. laaste WAs 6 opgawe – Alle werkgewers wat werknemers in diens het vir wie salaris of lone betaal word moet registreer;
·    Naam van die Gesondheid- en Veiligheidsverteenwoordiger; en
·    Gelyke Indiensnemingsplan, indien van toepassing.

Voorsorg is beter as nasorg. Vermy boetes. Wees gereed om die Departement van Arbeid se inspekteur te woord te staan as hy/sy om inligting by u besigheid aanklop.

U is welkom om vir Jana Burger (janab@asl.co.za) of Corne Moss (corne@asl.co.za) by 021 840 1600 te kontak sou u wou verseker dat u aan die nodige vereistes voldoen.

Ons dienste en die koste daaraan verbonde

“Hoeveel sal ‘n oudit kos?”

“Hoeveel gaan julle ons vra om ‘n stel finansiële state op te stel?”

“Hoeveel vra julle vir ‘n belastingopgawe?”
    
“Ons ouditeure is te duur – hoeveel gaan julle  ons vir ‘n jaar vra?”

Hierdie is vrae wat gereeld aan ons gevra word en daar is geen eenvoudige antwoord op die vrae nie.  Uit die aard van die saak is daar baie veranderlikes wat in ag geneem moet word alvorens ons ‘n aanduiding van ons kostes kan gee en hierdie skatting kan eers gemaak word nadat ons ‘n behoorlike begrip van die kliënt se behoeftes en omstandighede verkry het.

In ‘n tyd waar die meeste kliënte besonder bewus is van kostes, is dit vir ons belangrik om te verseker dat ons kliënte behoorlik ingelig word oor wat hulle vir ons dienste moet betaal terwyl hulle steeds gerus kan voel dat hulle waarde vir hulle geld kry.  Daar word deurlopend meer belasting-, statutêre- en ander vereistes aan besigheidsentiteite, werkgewers en belastingpligtiges gestel en dit is vir ons erns om te verseker dat daar aan hierdie vereistes voldoen word.  Hierdie voldoening gaan vanselfsprekend gepaard met koste-implikasies en dit is gewoonlik kostes waaroor nie ons of ons kliënt beheer het nie.

Die kostes vir die dienste wat ons lewer word wesenlik op een van twee maniere bereken:  Eerstens op grond van die tyd wat ons bestee aan die uitvoering van die werk; die uurtarief word bereken op grond van die vlak van ondervinding en akademiese kwalifikasie wat vereis word van die persoon wat die diens lewer. Tweedens is daar ‘n aantal dienste wat gelewer word teen ‘n standaardtarief per diens.

Net soos ons kliënte wil ons ook ons faktureringstelsel so eenvoudig moontlik hou, nie net omdat dit maklik verstaanbaar is nie, maar ook om ons, sowel as ons kliënte, se administrasie te vergemaklik.  So, byvoorbeeld, sou net een faktuur vir ‘n jaar se diens vir ons ideaal wees maar omdat ons in sommige gevalle gediversifiseerde dienste aan ‘n kliënt lewer is dit nie altyd prakties moontlik nie.

Die doel van hierdie artikel is om ‘n bietjie meer duidelikheid aan ons kliënte te gee oor die aard van die verskillende dienste wat ons lewer en die koste hieraan verbonde. Hierdie oorsig is nie noodwendig algemeen van toepassing op alle kliënte nie maar ons vertrou dat u wél die dienste wat ons aan u lewer, hier sal vind.

1.    Oudit- en oorsigdienste

Oudit- en oorsigdienste word gewoonlik op ‘n jaarlikse basis gelewer en ons koste in hierdie verband word hoofsaaklik bereken op grond van die tyd deur die ouditspan bestee en, waar van toepassing, reis- en verblyfkoste.

In die geval van kleiner oudits vind fakturering plaas nadat die oudit afgehandel is. Andersins geskied dit soos ooreengekom met die kliënt, in welke geval dit kan behels dat ons ‘n deposito vra alvorens ons met die werk begin of, as alternatief, dat interim-fakture gelewer word namate spesifieke dele van die oudit gefinaliseer word.

Gesien ons professionele aanspreeklikheid met die uitvoer van ‘n oudit kan ons verantwoordelikhede nie deur ‘n kliënt beperk word nie. Dit is gevolglik moeilik om vooraf ‘n akkurate aanduiding van kostes te gee omdat die omvang van ouditwerk in die loop van die oudit kan verander.

2.    Opstel van finansiële state

Die koste verbonde aan die opstel van finansiële state word bereken op grond van die tyd bestee deur die persone wat die state opgestel en kwaliteitsbeheer toegepas het.  Fakturering vind gewoonlik plaas nadat die opdrag uitgevoer is.

3.    Belastingdienste

Daar is verskeie belastingdienste wat ons aan kliënte lewer. Die mees algemene diens is die voltooiing en indiening van voorlopige belastingopgawes en die reël vir betaling van voorlopige belasting, asook die voltooiing en indiening van jaarlikse belastingopgawes en die instandhouding van die kliënt se eFiling profiel.

Ons probeer sover moontlik standaardtariewe toepas vir hierdie dienste en ons kliënte ontvang aan die begin van die jaar ‘n faktuur vir die jaar se belastingdienste (uitgesonder die voltooiing en indiening van die jaarlikse belastingopgawe, aangesien dit tydgebonde is en gewoonlik saam met die finansiële state gefaktureer word). Die aanvanklike faktuur sluit al die werk in wat verbonde is aan die voorlopige belastingopgawes, die instandhouding van die eFiling profiel en die nagaan van die belastingaanslag.

Enige belastingwerk wat buite die omvang soos hierbo vermeld onderneem word, word by afhandeling van die opdrag gefaktureer op ‘n basis van tydkoste aangegaan.

4.    Sekretariële dienste

Die meeste sekretariële dienste, d.w.s. dié van toepassing op maatskappye en beslote korporasies, word gefaktureer teen ‘n vaste koste gekoppel aan die diens wat gelewer word. Fakturering geskied na afhandeling van die opdrag.

Ander sekretariële dienste wat gefaktureer word teen ‘n vaste tarief na afhandeling van  die diens, is die volgende:

a.    Die verskaffing van dokumentasie ten einde te voldoen aan die vereistes van die Financial Intelligence Centre Act;

b.    Die uitreiking van ‘n B-BBEE-sertifikaat vir entiteite met ‘n omset van minder as R5 miljoen (of soos vereis deur die         spesifieke bedryf);

c.    Die uitreiking van solvensiesertifikate, aandeelhouers- en direkteursbevestig ings en ouditsertifikate (gewoonlik van     toepassing op eiendomstransaksies).

Ons stuur ook aan die begin van elke jaar ‘n rekening vir sekretariële dienste (hoofsaaklik vir die veilige bewaring van dokumentasie), aan ons kliënte.

Alle maatskappye en beslote korporasies moet jaarliks ‘n opgawe by die CIPC indien, welke taak ons in die meeste gevalle namens ons kliënte verrig. Ons koste in hierdie verband is ‘n vaste fooi per indiening.

5.    Rekeningkundige verwerking van transaksies en maandelikse bestuurstate

Ons kostes vir die rekeningkundige verwerking van transaksies op ‘n maandelikse- of twee-maandelikse basis, die opstel van bestuurstate, en gewoonlik die berekening van die BTW-aanspreeklikheid en die voltooi en indien van die nodige opgawes, word in die reël gebaseer op die tyd bestee aan die werk.

Aangesien die aktiwiteite nie van maand tot maand wesenlik behoort te verander nie, is dit vir ons moontlik om na so drie of vier siklusse ‘n reëling te tref vir ‘n vaste koste vir die dienste.

Fakturering vind gewoonlik plaas aan die einde van die periode waarop die dienste van toepassing is.

6.    Statutêre registrasies

Indien ons namens ‘n kliënt enige statutêre registrasies onderneem, bv. registrasie as ‘n ondernemer vir BTW-doeleindes, of as ‘n werkgewer vir die doeleindes van werknemersbelasting, werkloosheidsversekering of vaardigheidsontwikkeling, word die kostes teen ‘n standaardtarief gefaktureer nadat die diens gelewer is.

7.    Bestuurskonsultasies

Konsultasies geskied op die basis van die tyd bestee, bereken teen die uurtarief van die persoon wat die diens lewer en word gefaktureer na afhandeling van die opdrag of soos onderling ooreengekom met die kliënt.

8.    Salarisadministrasie

Die lewering van salarisdienste op ‘n maandelikse basis vind gewoonlik plaas teen ‘n bedrag waarop vooraf ooreengekom word en word bereken op grond van ‘n tarief per werknemer per maand.

Hierdie dienste sluit gewoonlik in die byhou van die verlofregister en die uitreiking van maandelikse salarisadviese aan werknemers, asook die sesmaandelikse- en jaarlikse rekonsiliasies.

Fakturering vind maandeliks plaas. Kliënte wat van ‘n debietorder gebruik maak vir vereffening  kry ‘n betalingskorting omdat ons administratiewe las op hierdie wyse ligter gemaak word.

9.    Trustregistrasie en -administrasie

Ons het ‘n standaardkoste vir die opstel en registrasie van ‘n trustakte en die diens word gefaktureer nadat die opdrag uitgevoer is.

In gevalle waar ons as professionele, onafhank-like trustee optree, hef ons ‘n jaarlikse fooi aan die begin van die jaar wat, na gelang van die omvang van die aktiwiteite in die trust en ons betrokkenheid as trustee, bepaal word.  Hierdie fooi sluit ons dienste in vir die bywoning, en hou van die notule, van een trusteevergadering per jaar.

Enige dienste wat gelewer word bo en behalwe    die dienste wat deur ons jaarlikse rekening gedek word, word gefaktureer op grond van die tyd bestee aan die uitvoering van die werk.

10.    Boedelbeplanning, -bereddering en  -administrasie

Ons koste vir boedelbeplanning word gewoonlik met die kliënt ooreengekom gegrond op die kompleksiteit van die beplanning. In gevalle waar daar bloot ‘n testament opgestel moet word en nie enige konsultasietyd van die direkteure benodig word nie, kan die diens selfs gratis gelewer word.  In gevalle waar ‘n direkteur by die beplanning betrokke is, word die koste bereken op grond van die tyd wat bestee word aan die werk.

Die vergoeding vir die bereddering van ‘n bestorwe boedel word statutêr vasgestel op 3,5% van die bruto waarde van die boedel.  Ons vra selde die volle vergoedingsfooi en kom gewoonlik vooraf met die testateur/testatrise oor die tarief ooreen, gewoonlik by wyse van ‘n bepaling in die testament.  Sou die testateur/ testatrise reeds oorlede wees en ons as agent optree vir die eksekuteurs, sal ons onderhandel oor die vergoeding, gegrond op die aard, omvang en kompleksiteit van die boedel.

Die voorgaande oorsig kan uiteraard nie klinkklare antwoorde verskaf op die vrae wat aan die begin gestel is nie maar ons vertrou dat u wel ‘n goeie begrip kon kry van hoe ons te werk gaan om die kostes vir u as ons kliënt, regverdig te bereken. Elke versoek om ons dienste word op meriete beoordeel binne die raamwerk van wat hierbó uiteengesit is en as u enige onsekerheid het is u welkom om met die direkteur wat met u sake werk, in verbinding te tree. U is natuurlik ook welkom om ons te skakel sou u enige vrae oor ons standaardtariewe hê.

Our services and the costs involved

“What will an audit cost?”

“What will you charge us to compile a set of financial statements?”

“What do you charge for a tax return?”

“Our auditors are too expensive – what will you charge us for a year?”

These are questions that are frequently asked of us and there are no simple answers to them. In the nature of things there are many variables that must be taken into account before we can give an indication of our costs and this estimate can only be made once we have gained a proper understanding of the client’s needs and circumstances.

In a time when most clients are particularly aware of costs it is important to us to ensure that our clients are properly informed of what they have to pay for our services and can rest assured  that they are receiving value for their money. Business entities, employers and taxpayers are continuously being confronted with more tax-, statutory-, and other requirements and we are serious about ensuring that these requirements are complied with. This compliance obviously has cost implications which neither we nor our clients can control.

The costs for the services we render are essentially calculated in one of two ways:  Firstly it is done on the basis of the time we spend on executing the work; the hourly tariff is calculated based on the experience and academic qualifications required of the person providing the service. Secondly, there are a number of services that are provided at a standard tariff per service.

Just like our clients we also want to keep our invoicing system as simple as possible, not only because it is easier to understand, but also in order to facilitate our administration as well as that of our clients. Thus, for example, only one invoice for a year’s service would suit us ideally, but because in some instances we also provide diversified services to a client, this is not always possible.

This article aims to provide our clients with a little more clarity about the nature of the services we render and the costs involved.  This overview is not necessarily generally applicable to all clients but we trust that you will nevertheless find here the services that we provide to you.

1.    Audit and review services

Audit and review services are usually provided on an annual basis and our costs in this regard are largely calculated based on the time spent by the audit team and, where applicable, travel and accommodation costs.

In the case of smaller audits invoicing is done after completion of the audit. Otherwise it is done as agreed with the client, in which case it could involve our asking for a deposit before the work commences, alternatively that interim invoices are issued as specific parts of the audit are completed.

Considering our professional accountability in the execution of an audit, our responsibilities may not be limited by a client. It is therefore difficult to provide an accurate indication of costs in advance since the extent of the audit work may change during the course of the audit.

2.    Compiling of financial statements

The costs associated with compiling financial statements are calculated on the basis of time spent by the persons who compiled the statements and exercised quality control. Invoicing is usually done after completion of the assignment.

3.    Tax services

We provide various tax services to our clients. Most common are the completion and submission of provisional tax returns and arranging for the payment of provisional tax, as well as completion and submission of annual tax returns and maintenance of the client’s eFiling profile.

We attempt as far as possible to charge a standard tariff for these services and at the beginning of the year our clients receive an invoice for the year’s tax services (excluding the completion and submission of annual tax returns since this is calculated by the time spent and is usually invoiced together with the financial statements.) The initial invoice includes all the work associated with the provisional tax returns, maintenance of the eFiling profile, and checking of the tax assessment.
Any tax work undertaken outside the scope of the work referred to above is invoiced at the conclusion of the assignment on the basis of the time costs incurred.

4.    Secretarial services

Most of the secretarial services, i.e. those applicable to companies and close corporations, are invoiced at a fixed cost linked to the service provided, and invoicing is done at the conclusion of the assignment.

Other secretarial services that are invoiced at a fixed cost upon conclusion of the service, are the following:

a.    The provision of documentation in order to comply with the requirements of the Financial Intelligence Centre Act;

b.    Issuing of a  B-BBEE certificate for entities with a turnover of less than R5 million (or as required by the specific industry);

c.    Issuing of solvency certificates, shareholder- and directors confirmations, and audit certificates (usually applicable to property transactions).

At the beginning of the year we also send an invoice for secretarial services, mainly for the safekeeping of documentation, to our clients.

All companies and close corporations are required to annually submit a return to the CIPC. In most instances we do this on behalf of our clients. The charge for this is a fixed fee per submission.

5.    Accounting processing of transactions, and monthly management statements

Our costs for the accounting processing of transactions on a monthly or bi-monthly basis, drawing up of management statements, and usually, the calculation of VAT liability and completion and submission of the required returns are, as a rule, based on the time spent on the work.

Since the activities are not likely to change in essence from month to month it is possible for us, after about three or four cycles, to arrange for a fixed cost for the services.

Invoicing is usually done at the end of the period to which the services apply.

6.    Statutory registrations

Should we undertake any statutory registration on behalf of a client, e.g. registration as a vendor for VAT purposes or as an employer for the purposes of employee tax, unemployment insurance or skills development, the costs are invoiced at a standard tariff upon conclusion of the service.

7.    Management consultations

Consultations take place on the basis of time spent, calculated at the hourly tariff of the person providing the service, and are invoiced after completion of the assignment or as mutually agreed with the client.

8.    Salary administration

Provision of salary services on a monthly basis usually takes place at an amount that is agreed on beforehand and is calculated on the basis of a tariff per employee per month. These services usually include maintaining the leave register and monthly issuing of salary advices to employees, as well as six-monthly and annual reconciliations.

Invoicing is done monthly. Clients who use a debit order for payment receive a payment discount because our administrative burden is reduced in this manner.

9.    Trust registration and administration

We have a standard charge for the compilation and registration of a deed of trust and the service is invoiced after completion of the assignment.

In instances where we act as a professional, independent trustee we charge an annual fee at the beginning of the year. This fee is determined in proportion to the extent of the activities in the trust and our involvement as a trustee, and includes our services for attending, and taking of the minutes of, one trustee meeting per annum.

Any services provided over and above those covered by our annual account is invoiced on the basis of time spent on executing the work.

10.    Estate planning, execution and  administration

Our charge for estate planning is usually agreed with the client on the basis of the complexity of the planning. In cases where a will must simply be drawn up without any consulting time required from the directors, the service is provided free of charge in certain circumstances. Where a director is involved in the planning, the costs are calculated on the basis of time spent on the work.

The compensation for execution of a deceased estate is fixed by statute at 3,5% of the gross value of the estate. We seldom charge the full compensation fee and agree in advance with the testator/testatrix on the fee, usually by means of a clause in the will. Should the testator/testatrix already be deceased and we act as agents for the executor, we will negotiate the compensation based on the nature, extent and complexity of the estate.

Inevitably, the above overview cannot provide absolutely clear answers to the questions raised at the start, but we trust that you will have gained a good idea of how we set about fairly calculating the costs for you as our client. Each request for service is evaluated on merit within the framework set out above and if you have any uncertainty you are advised to get in touch with the director who deals with your affairs. You are, of course, also welcome to call us should you have any questions about our standard tariffs.


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