Four things to keep in mind when starting your accounting practice

1. Have you got the experience?

 

You may be freshly qualified as an accountant, with a strong independent streak coursing through your veins, and eager to break into the working life as your own boss. But this may be an error. It is recommended to accrue a good deal of varied experience as an accountant if your dream is to start your own practice.

 

Working for a large firm (one of the so-called Big 4 of PricewaterhouseCoopers, EY, Deloitte and KPMG, for instance) provides you with knowledge of best practice and niche accounting. Transitioning from a role in one of these firms to a smaller accounting firm, specialising in local clients, will give you experience in the dynamics involved in smaller clients, and a good sense of the variety of tasks that you can expect to do when you decide to open your own firm. Collecting experience will serve you well, and the time spent in these kinds of firms can serve to fire up the passion needed to strike out on your own.

 

2. Have you got the passion?

 

As a freelance or small business accountant, your clients will typically be small business owners or private individuals. This means that, unlike working at a large firm in which clients can seem more like faceless entities than collections of human beings, one of your primary skills is going to be managing personal relationships. There must be a strong empathetic streak running through you. Your work is likely going to have a large effect on the successes of those for whom you work. Passion for this kind of work – intimate, specialised, with a view to long-term connection – is indispensable, and will be the difference between failure and flourishing.

 

3. Have you got the financial position?

 

You may have the know-how, and the desire, but if you cannot afford to eat when you’re starting out on your own, success will never come. Starting your own accounting practice will require planning and prudence. You need to be confident that you can have some time to secure your first clients, and that you can afford the outlays on the equipment that you will need to do your job – a laptop, internet, accounting software, stationery, and so on.

 

4. Have you got the time?

 

For many, a great benefit of being employed as an accountant is the regularity and stability of the demands on your time – work hours are set, and everything outside of this is your own. This won’t be the case as you start out on your own as an accountant. Working odd-hours, late into the evenings, is likely to characterise the first chapter of this phase in your life, as you work to establish a reputation as a reliable and hard-working accountant for your clients. For some, this irregularity will be opposed to the life that they want to live – but if it’s not, then starting your own accounting practice might be for you.

Nominate an amazing small business for the 702/Cape Talk Small Business Awards with Sage One

If you know of a small business that manages to rise above the rest, a provider of an outstanding service or wonderful product, now is the time to nominate them as a potential recipient of the 702/CapeTalk Small Business Awards with Sage One.

 

Now in their 8th year, the Small Business Awards are a celebration of Gauteng and Western Cape entrepreneurial excellence, and Sage One has a long and proud association with the awards.

 

Sage, as the largest supplier of accounting and payroll software worldwide to SMEs, is deeply committed to growing small business. Ivan Epstein, President for Sage International (AAMEA) and Chairman of the Sage Foundation emphasises the importance of celebrating the efforts of South African SMEs, “South Africa’s entrepreneurs in small and medium businesses trust us as they power the country’s economy. It is these entrepreneurs who are the drivers of prosperity and it’s our privilege to celebrate their achievements. We know that it takes hard work and human sacrifice to turn a dream business idea into a way of life. That’s why we sponsor these Awards every year – to make the voices of the entrepreneurs heard.”

 

Much like the businesses that are nominated, Sage South Africa began as a start-up. Originally known as Softline, the business was borne from a vision to simplify the lives of business owners. Founded by Ivan Epstein and Alan Osrin, and joined soon after by Steven Cohen in 1988, Softline was established during the formative years of the software industry with a mere R1, 500 loan. It was listed on the JSE Securities Exchange South Africa in February 1997, and delisted in 2003 to be acquired by The Sage Group plc. Softline changed its name to Sage in February 2013.

 

Today, Sage has over 13,000 employees across 23 countries and we work with millions of business people in all types of industries around the world. So when we talk about grit, passion and vision, it’s a voice of experience – one that we and many other South Africans share.

 

The 702/CapeTalk Small Business Awards with Sage One are an opportunity to give something back to small businesses that have a core of excellence, and give small business a big boost.

 

Prizes this year for winners include an advertising airtime package on 702/CapeTalk worth R250 000, a laptop, free access to Sage One’s accounting and payroll software and a year’s worth of software support, and a Sage training course of the winner’s choice. Runners-up come away with advertising airtime worth R125 000, free access to Sage One’s accounting and payroll software and a year’s worth of software support, and a Sage training course of their choice.

 

Past winners have seen marked improvements in their businesses. Roof Rats, a roof and ceiling cleaning company that won the Gauteng award in 2013 reported that their business quadrupled in the year following their victory, growing their staff complement from 11 to 44. 2014 winners, Book Express, likewise experienced a 20% increase in telephone enquiries and walk-ins thanks to the exposure that their prize provided.

 

Sage looks to support the growth of small businesses in South Africa with their payroll and accounting software, and also, through association with the 702/CapeTalk Small Business Awards. If a little company born from little more than a vision and small loan can become a world-beater, so too can South African small businesses.

 

If you know a small business that deserves recognition, nominate them for a 702/CapeTalk Small Business Award. Visit www.sba.702.co.za or www.sba.capetalk.co.za for more information.

Accounting pitfalls all new small businesses should avoid

When you start a small business, you are faced with several challenges. In fact, these challenges start long before the business even opens its doors. All of the planning, sourcing and accounting considerations that need to be made can take months, if not years, to craft and finalise.

 

Considering all of the work that goes into starting a business, it would seem a pity to let it all crumble because of accounting pitfalls. Below, you will find some of the most common ones – if you’re a small business owner, be on the look-out for any signs of the following:

 

Not checking the books

 

A small business’s accounting needs to be done as often as possible, especially when it’s in its infancy. You need to keep abreast of everything happening in your business so that you know exactly which areas need more focus. Things can get pretty busy when a business first starts and checking the books may seem like a tedious job, so it may be wise to invest in accounting software, as it is sure to make life a lot easier for you.

 

Not hiring professionals

 

It’s incredibly important to get the right people for each respective job, even if it means having to invest more in salaries. While you, as a business owner, want to make sure that everything runs smoothly, you may not be able to complete certain tasks. For example, if you are not a trained accountant, you should definitely either hire a permanent accountant or outsource to an accounting firm. With something as intricate as accounting, you need a professional on the job.

 

Not separating personal and business accounts

 

All small business owners have a natural need to nurture and protect their business – it’s only normal. However, it is important to separate business accounts and personal ones. This gives you a much better and more realistic view of how well your business is doing. However, bank charges on business accounts can often be fairly high. Instead of going to a bank at first, consider options such as SnapScan and PayPal until your business starts drawing a profit, as their fees are generally lower.

 

Not getting the right credit

 

Not many people can start a business without needing to obtain some kind of credit and most automatically think that the bank is the only viable option. This might not actually be the best option for your specific business though. For example, if your idea is a start-up that is driven to create jobs for others, you may just be able to source the money, or at least a portion of it, from something like crowd-funding. Do some research and make sure that the way in which you’re receiving funding is the best option for your business – you don’t want to end up spending years paying off unnecessary interest.

 

The key to maintaining good business accounting is to be vigilant with your small business. Hopefully, the points listed above will give you good insight into how to make sure that your business’s accounting is always accurate and up-to-date.

 

 

Seven skills you need to succeed in accounting

The world of accounting is one that is constantly evolving and being an accountant in that world requires so much more than just being able to crunch numbers. Whilst having the right kind of technical skills is essential, there is a wealth of other skills that can help you stand out from the rest and can take you from being a good accountant, to a great one.

Knowing what it takes to be successful in this industry will not only increase your overall job satisfaction, but will also make it easier for you to hone the specific skills that can help you reach those long-term career goals. We take a look at those skills you need to brush up on in order to succeed in accounting.

 

Time management maestro

 

Tight deadlines are not foreign to accountants and as a result, they have to be able to be wizards at managing their time. Very often, an accountant has to juggle various tasks and the reality is, that if he’s not meticulous when it comes to budgeting of time, chances are that many missed deadlines will occur. Correct time management will equal maximising productivity and hopefully getting everything done, not only well, but more importantly, on time as well. Timing is everything and when you have many competing priorities, being able to manage your time effectively will mean dealing with them more efficiently.

 

Master of organisation

 

This ties in strongly with the first skill: organisation is the key to successful time management. Without being organised and having a set structure in place, it becomes increasingly difficult to stay on top of tasks and manage your various responsibilities. Accountants are busy people, usually with large workloads, and in order to carry out their duties to the best of their ability, they need to be organised. Many will develop their own systems for staying on track and completing tasks because without them, things would invariably fall through the racks. Accountants need to prove that they are reliable and competent, and being organised can certainly help them achieve this.

 

Rock star communicator

 

Being able to communicate effectively and clearly is a skill that is almost always valuable in any line of work – and this is even truer when it comes to accountants. They require both excellent written and verbal communications skills that allow them to convey necessary information to those who require it. Accountants need to be able to present their findings in a way that is understandable and digestible for all. Often they end up working independently but when it comes to communicating the vital information and data with which they’ve been tasked to determine, a great accountant will be able to deliver that in a clear and logical way.

 

Leader of the pack

 

Another essential trait accountants should possess is strong leadership qualities. Great accounts are usually good leaders who set an example for others, and who mentor and teach those around them. They successfully find the balance between being a role model and the person in charge, and are often seen to be visionaries who are able to make logical, impactful decisions that will serve in the long-term. An impressive leader is one who combines the right amount of confidence with patience and approachability, and is someone who isn’t afraid to delegate as he sees fit. More than just strategic thinkers, successful accountants are also able to lead effortlessly and fairly.

 

Natural business acumen

 

The one thing that undoubtedly stands accountants in good stead is having a knack for business and its processes. Possessing natural business acumen can only help an accountant go far in his career as it will allow him to see the bigger picture and understand how his role in the business can assist it in reaching its goals. The more knowledge you have about the inner-workings of the business you’re in, as well as that gut instinct when it comes to conducting business, the more likely you are to succeed in your role as an accountant.

 

Adaptability guru

 

As mentioned earlier, the world of accounting is a dynamic and ever-changing one. It’s because of this that as an accountant, you need to be adaptable and flexible. Situations can change in an instant and a great accountant will know how to bend with the change and quickly take on the role he requires. It’s when you’re open to adapting that you learn and grow the most, two things that are sure to help you become the best accountant you can possibly be. No matter what’s thrown your way, you need be able to adjust and make it work – that’s the mark of a truly impressive accountant.

 

Transparency is the name of the game

 

Successful accountants are those people who establish themselves as trusted players within a team and constantly show that they are always looking out for their clients’ best interests. They adhere to the strict ethical guidelines that govern the world of accounting and make it their business to foster working environments that are both collaborative and respectful. Establishing a level of trust between yourself and those you work with/for is vital and one way of doing that is to be open and honest 100% of the time – people value that more than you know.

 

There are many skills one needs to succeed in accounting, so whether you’re considering getting into the field or you’re already in it and you’re looking to improve, then take note of these seven skills. Here’s to becoming great!

 

 

 Featured image: http://www.baker.edu

Cash is king: How to improve your cash flow

The first few years of a new business can be tough, with money very often being at the root of many of the problems. The key is to be smart about your money and to free up as much cash as possible, and this is something that requires careful planning and management. A common problem seems to be the lag in time that occurs between paying suppliers and employees, and money coming in from customers and others who owe you.

The first few years of a new business can be tough, with money very often being at the root of many of the problems. The key is to be smart about your money and to free up as much cash as possible, and this is something that requires careful planning and management. A common problem seems to be the lag in time that occurs between paying suppliers and employees, and money coming in from customers and others who owe you. There are a few small changes you can make to your business to rectify this issue, as well as others that will help you manage your cash flow more effectively. Read on to find out more.

Measure your cash flow

In order to improve your cash flow, you need to start at the beginning. Mapping out the pathways of cash within your business clearly will give you a better understanding of where things stand. You need to identify where cash comes from and where it’s headed. Making a few mistakes when it comes to money is to be expected, especially during the first few years after you’re up and running, but it’s about learning from them and making the necessary changes to improve the outcomes. If you have a clear overview of your business’s money movements, you’ll hopefully be able to prevent mistakes from happening, find solutions faster and stretch your cash further.

Improve receivables and stretch out payables

At the end of the day, if a large amount of the money coming in from sales and services rendered is coming in long after sale/completion, chances are you’ll go out of business, and fast. Your goal should be to delay payments you need to make for as long as possible, whilst simultaneously minimising the amount of time you give customers to pay you. Things like issuing invoices promptly and offering discounts are effective ways of getting people to settle faster. You need to enforce a payment discipline that stands for both you and your customers: If you have 60 days to settle an account, take those 60 days to pay, and when it comes to customers, insist that accounts are payable in ‘x’ amount of days following issue of the invoice and monitor payments to stay on top of this. Lastly, make it simple and easy for people to pay you by offering various methods of payment – they’ll be far more likely to settle sooner.

Set up a line of credit with the bank

No business wants to be behind in its payments, but it’s best to think ahead and prepare for the worst. There may be times when you could do with a little extra cash to tide you over and having a line of credit available from your bank can be just the solution. Establishing this before you appear too risky to assist financially is a good idea, so try and get this set up before you even start trading.

Work with an accountant

Hiring an accountant or a financial expert to manage your finances is an investment you will make in your business. Some people may be wary of doing this with the view that it’s a costly expense and is something the business owner can do himself. However, it will almost certainly be money that is well spent because in the long run you’re likely to end up saving money, and that will likely be due to your cash flow being overseen by an expert. Instead of fumbling along and making costly mistakes that add up, enlist the help of someone who can help your business thrive financially.

Lastly, monitor your stock levels

Be sure to know what it’s your stock room at all times. Holding on to large amounts of stock that’s just sitting can be detrimental, as ultimately you’re keeping cash tied up that could be used elsewhere in the business. You need to keep track of your sales and make sure the stock on your shelves is in line with these – otherwise you’ll be holding on to money that could really be improving your cash flow.

Sage One accounting software can give you a bird’s-eye view of your business and help you stay on top of everything accounts related. It will help you manage your cash flow easily and effectively, ensuring your business is kept in the best possible financial position.

 

More money matters you may be interested in: How to create a budget for your small business

 

cash flow

Cash is King: How to Improve Your Cash Flow

The first few years of a new business can be tough, with money very often being at the root of many of the problems. The key is to be smart about your money and to free up as much cash as possible, and this is something that requires careful planning and management. A common problem seems to be the lag in time that occurs between paying suppliers and employees, and money coming in from customers and others who owe you. There are a few small changes you can make to your business to rectify this issue, as well as others that will help you manage your cash flow more effectively. Read on to find out more.

Measure your cash flow

In order to improve your cash flow, you need to start at the beginning. Mapping out the pathways of cash within your business clearly will give you a better understanding of where things stand. You need to identify where cash comes from and where it’s headed. Making a few mistakes when it comes to money is to be expected, especially during the first few years after you’re up and running, but it’s about learning from them and making the necessary changes to improve the outcomes. If you have a clear overview of your business’s money movements, you’ll hopefully be able to prevent mistakes from happening, find solutions faster and stretch your cash further.

Improve receivables and stretch out payables

At the end of the day, if a large amount of the money coming in from sales and services rendered is coming in long after sale/completion, chances are you’ll go out of business, and fast. Your goal should be to delay payments you need to make for as long as possible, whilst simultaneously minimising the amount of time you give customers to pay you. Things like issuing invoices promptly and offering discounts are effective ways of getting people to settle faster. You need to enforce a payment discipline that stands for both you and your customers: If you have 60 days to settle an account, take those 60 days to pay, and when it comes to customers, insist that accounts are payable in ‘x’ amount of days following issue of the invoice and monitor payments to stay on top of this. Lastly, make it simple and easy for people to pay you by offering various methods of payment – they’ll be far more likely to settle sooner.

Set up a line of credit with the bank

No business wants to be behind in its payments, but it’s best to think ahead and prepare for the worst. There may be times when you could do with a little extra cash to tide you over and having a line of credit available from your bank can be just the solution. Establishing this before you appear too risky to assist financially is a good idea, so try and get this set up before you even start trading.

Work with an accountant

Hiring an accountant or a financial expert to manage your finances is an investment you will make in your business. Some people may be wary of doing this with the view that it’s a costly expense and is something the business owner can do himself. However, it will almost certainly be money that is well spent because in the long run you’re likely to end up saving money, and that will likely be due to your cash flow being overseen by an expert. Instead of fumbling along and making costly mistakes that add up, enlist the help of someone who can help your business thrive financially.

Lastly, monitor your stock levels

Be sure to know what it’s your stock room at all times. Holding on to large amounts of stock that’s just sitting can be detrimental, as ultimately you’re keeping cash tied up that could be used elsewhere in the business. You need to keep track of your sales and make sure the stock on your shelves is in line with these – otherwise you’ll be holding on to money that could really be improving your cash flow.

Sage One accounting software can give you a bird’s-eye view of your business and help you stay on top of everything accounts related. It will help you manage your cash flow easily and effectively, ensuring your business is kept in the best possible financial position.

 

More money matters you may be interested in: How to create a budget for your small business

 

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