Access to credit still easy in South Africa

Woman in small shop Ghana

According to the World Bank‘s 2013 Doing Business Report, South Africa has been joint-ranked, along with Malaysia and the United Kingdom, as the easiest country in the world for small and medium-sized enterprises (SMEs) to access credit.

Gerrie van Biljon, executive director of Business Partners Limited, says that this will be the third year in a row that South Africa has achieved the ranking and that that it is a very encouraging sign for small business owners locally.

He says that there is however evidence that a lack of SME financing still exists, despite the reported easy credit access. “Access to finance remains the number one hindrance for SMEs, regardless of this high rating. This is most likely due to the fact that SMEs are unsure of how to apply for finance, or that they do not qualify for the type of financing that is available. It is therefore of utmost importance that SMEs understand the stringent credit conditions that need to be fulfilled to obtain financing.”

via Access to credit still easy in South Africa – World Bank report.

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How accountants can save the world

Accountants' Office

Will accountants save the world? That was one of the most provocative questions to come out of the Rio+20 conference on sustainable development last week.

While it will take some time to get an answer to that question, the fact that it’s being asked demonstrates the level of concrete involvement in sustainability issues by the business community, which was more involved — and more engaged — than at any United Nations conference in history. And at least at the city and organization levels, cross-sector collaboration was evident, declarations rampant and commitment to concrete action well underway.

Especially in the finance sector, where arguably the most opportunity exists, I heard a lot that gave me reason to hope. During my time in Rio, I talked to bankers, accountants, business leaders and academics — all of whom spoke passionately about the need to value and appropriately account for nature.

Here are five efforts that stood out as examples of the role that just about every stakeholder in the financial markets system — bankers, investors, insurers, corporations, accountants, top executives, stock exchanges, or financial analysts — can play:

Natural Capital Declaration (NCD)’s 39 banks, investors and insurers (see Principles for Sustainable Insurance) joining forces with more than 50 countries — including the UK, Philippines and South Africa, as well as corporations, including Unilever, Dow Chemical and Puma — to make a collective call for natural capital valuation. A strong start, but one issue is that the larger financial institutions are not yet involved.

via How accountants can save the world — maybe | GreenBiz.com.

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Big chance for small business

Small Businesses Girvan still has many small i...

BizLaunch was unveiled yesterday in Johannesburg by Clive Pintusewitz, Standard Banks director of small enterprise development.

The new package, aimed at businesses within their first year, will enable small businesses to keep track of their cash, pay suppliers, deposit funds into a business bank account and get basic advice – all for just R90 a month.

Businesses that have been operating informally can also get BizLaunch, even if they have been in existence for over a year.

Other impediments that lead to closure include access to funding and markets, and cash flow management.

“We know that there is a big issue with small businesses and we want to see them grow. What we have done is to look at the needs of those businesses and packaged a solution that brings a lot of support to those businesses,” Pintusewitz said.BizLaunch offers unlimited transactional banking. They are targeting 80000 businesses in the current financial year.

“We have partnered with Softline Pastel, who are the leading accounting software to offer MyBusiness Online, which is a solution built specially for start-up businesses. What we have seen is that one of the reasons businesses fail is because they cannot track their finances and cannot manage invoices and payments,” he said.

“In our interaction with our clients we have learnt that small businesses fail because they do not get revenue. The second is managing your cost and stock. Also, when they have ordered the stock and the customers take time to pay, it creates a cash-flow problem.”

BizLaunch will be available at all Standard Bank branches.

Pintusewitz said for those who do not have access to a computer there was a mobile version if they have a smartphone, and soon an offline version will be available.

via Big chance for small business – Sowetan LIVE.

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New Companies Act points system

A bond issued by the Dutch East India Company,...

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Initial complications are to be expected as companies and close corporations CCs try to work out how to calculate public interest scores PIS in the New Companies Act and interpret the regulations.That’s the view of Ian Scott, joint managing partner of the Grant Thornton Cape office.“The new Companies Act, which came into effect on 1 May 2011, includes a PIS calculation which determines what report these entities need going forward, unless they hold assets in a fiduciary capacity with an aggregate value of over R5 million, in which case an audit is needed.”“The new Act also brings increased regulation to close corporations as their PIS calculations are subject to the same criteria as companies, although the outcomes are different,” says Scott.The Regulations provide for both activity and size criteria to determine whether or not companies or close corporations require audited financial statements. The Regulations state that every entity is required to calculate its PIS at the end of each financial year and the score is calculated as the sum of the following:A number of points equal to the average number of employees as determined by the Labour Relations Act of the company during the financial year;One point for every R1 million or portion thereof in third-party liabilities at year end these exclude shareholder loans and intercompany loans with common shareholdings;One point for every R1 million or portion thereof in turnover during the financial year; andOne point for every individual who, at the end of the financial year, is known by the company to directly or indirectly have a beneficial interest in the business.If a close corporation has a PIS score below 100 it requires an accounting officer’s report just the same as it did previously.

via New Companies Act points system gives useful guidelines but determinations complicated – Grant Thornton.

Good accounting improves business competitiveness

Salford Business School

Image by University of Salford via Flickr

BY PHILLIP CHICHONI

The managing director of Swiss bank, UBS,  is in trouble. The board wants to fire him for allowing over US$2 billion to be lost through the hands of  rogue trader Kweku Abodoli. One of the largest financial institutions in the world, UBS’s financial control systems failed to detect fraudulent activities and suffered a huge loss as a result.

I asked a number of small business owners if they knew how much money they were making each year. Frighteningly, the majority did not know exactly. As long as there was cash in the bank, they did not bother themselves with much else as regards the financials of the company. So if an employee finds a way of defrauding them, they would have no way of detecting it.

Lack of accounting and financial control systems is a big problem among SMEs. They cannot measure their success, growth and efficiency. With no budgets and cash flow management systems, business decisions are made in the dark and on an ad-hoc basis. An accounting system helps in managing finances, maximising returns on investments while improving the competitiveness of businesses.

Your accounting system should provide an accurate picture of your business and how it is performing. Setting up a good accounting system and understanding the numbers produced can make a major difference in how your business fares in the long run. The financial statements produced from your accounting system will help you in several ways.

HOW TO KNOW IF YOU ARE REALLY MAKING MONEY

A good accounting system should tell you how much money you are making in terms of total sales, the cost of the goods sold, expenses and net profit. Success in business is measured in financial terms. The financial results at the end of a period will reflect how successful the business was in the given period. Comparing the financial results over time will show if the company is growing and improving in efficiency.

via SME Chat:Good accounting improves business competitiveness.