I know that I continually harp on about getting the right bookkeeper/accountant in place – the reason for this is that having the wrong one can end up costing you an arm and a leg.
It is imperative that your bookkeeper/accountant advise you in advance of any changes that will affect you. Imagine the waste of money and resources if the Company owner only found out that the has to pay VAT monthly when he reaches the R35 million turnover per annum mark, 6 months after he has met that particular milestone? The penalties and interest would be absolutely staggering!
The bookkeeper/accountant must also ensure that you are given monthly financial statements or management reports. Here’s the thing though, if you are given reports or statements that you have no idea how to read, these reports/statements are actually not worth the paper that they are printed on! So it is therefore incumbent upon the bookkeeper/accountant to make sure that you understand what it is that they are giving you. There is no way that you can make an informed decision around the financial aspects of your business if you have no idea about what is going on.
In terms of the law, your Company is obliged to produce Annual Financial Statements. This is to evidence to SARS (should they ask) what your financial status was during the course of the year and of course, so that the Company taxes can be correctly calculated. This must also be done timeously by your bookkeeper/accountant and they must be signed off correctly in terms of the law.
If, in terms of the law, your books must be audited, then it is the responsibility of the bookkeeper/accountant to assist the auditors with the auditing process and communicate and liaise with the auditors.
All of these issues should be done automatically and timeously by your bookkeeper/accountant, but that said, you – the business owner, remain accountable and responsible, so you need to manage your relationship with your bookkeeper/accountant to ensure that you are kept up to date.
As with most things in life, there are good bookkeeper/accountant’s and bad. Make sure that whomever you choose is at the very least registered and properly qualified and remember that no matter how brilliant/qualified/professional they are – you are ultimately responsible, so ensure that you, at the very least, pick one that you can build a relationship with and not someone who is just a voice at the other end of the telephone and that you are not just another invoice that has to be raised every month.
Finally – understand that SARS will not accept “ignorance of the law” as a reason for you not doing or paying stuff. Irrespective of whether or not you have a bookkeeper/accountant who did or didn’t do what needed to be done, it is your responsibility to ensure that things are done and you will be held accountable.
It’s your business at the end of the day and you need to keep your finger on the pulse.