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Cloud-based accounting systems and your business.

Let Technology do the work

There are still many outdated systems out there that are soon going to become redundant. In this interesting time, we found ourselves in. Many businesses have been tested in the continuity of their operations with the rise of the COVID-19 pandemic. How much anxiety did it cause you to move your staff off-site? What impact is it having on your business socially and economically? Were you able to continue? Have you considered cloud-based accounting systems as a place to start?

It is time for an update

Updating your systems can have benefits across the board and will have a larger impact than you might expect. These benefits may include cost saving, working with real-time data and systems integrating with one another. I have recently been to a potential client to conduct a systems audit. Everything was fine and dandy until all operations were disrupted. The staff could not access information from home, accounting, client service, and back-office information were all backed up on a server. Yes, information can be accessed by the VPN server, but let’s be honest. Anyone who has worked with these systems knows the shortfalls. It is slow, unstable and could cost a fortune. Your information can be lost in an instant, be it a server crash, theft or fire.

Cloud-based systems

The simple answer is cloud-based accounting systems such as Xero and SageOne. Your data is safe, secure and can be accessed anywhere in the world, as long as you have an internet connection and a computer.

The beauty of these systems is that it never stops evolving and is changing the landscape of business. Take this time at home to do some research on what systems you can use. Just in a week, you have heard about Microsoft Teams, Zoom or Google hangouts. Now is the time to make a proactive decision to protect your business in the coming months ahead. We do not know what the future holds, tomorrow is a mystery. But you can control if you want to stay ahead of the curve.

Please contact us to set up a video conference to chat about possible integrations in your business.

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Do you qualify as a Small Business Corporation & Pay less Tax

What is a Small Business Corporation (Section12E)?

Section 12E is a tax relief structure for small businesses SARS has put into place to help growing businesses in South Africa. There are talks of the Davis commission proposing a drastic reform to the current Small Business tax model which includes removal of some of the requirements to qualify as a SBC or to implement a refundable compliance rebate to companies who achieved tax compliance status. It still remains advantageous to meet the requirements of a Small Business Corporation.

The following tax table can be used for financial years ending 01 April 2018 and 31 March 2019

Taxable Income (R)Rate of tax
0 – 78,7500%
78,751 – 365,0007% taxable income above 78,150
365,001 – 550,000 20,080 + 21% of taxable income above 365,000
550,000 – and above58,930 + 28% of taxable income above 550,000

Qualifying requirements

  • The Company, Close corporation or Co-Operate is not an employment entity.
  • All shareholders or Members must be natural persons and not hold shares in any other entity (Not even for one day of the year)
  • Gross income may not exceed 20 million in the year of assessment
  • If more that 20% of income derives from investment income.
  • Entity may not be a personal service provider.
  • If the entity employs three or more unconnected fulltime employees for core functions of the entity during the tax year, the entity will qualify.

If your business qualifies as a Small Business Corporation, there are major tax benefits in the form of reduced tax rates and accelerated depreciation on productive assets which allows your company to depreciate its assets at an accelerated rate compared to other businesses. This results in a higher expense on your income statement that results in less tax.

Feel free to contact Digital CFO should you require more assistance.