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Cash Flow

Set the Record Straight

Financial records not what they should be? Here are six simple steps to getting it right.

Tursuis Ruiters



Financial Records-Cash-Flow-Financial Management

Recent studies have shown that one of the biggest contributors to the failure of SMEs in South Africa (and globally) is the lack of proper record keeping. But, knowing what to focus on – and which records are important – can be tricky when starting out. So, what do new entrepreneurs need to know?

The reality of record keeping

Let’s use a real-life example to unpack these issues. Samuel Zulu has been running his business for the last two years but despite working extremely hard he never seems to be able to take his business to the next level. While he is constantly ordering new stock and taking more orders, he’s not really sure if his business is actually profitable or not.

Now he’d like to approach the bank for a loan so that he can expand his premises, but they’ve asked him to provide a set of financial records and he’s not really sure what they mean – nor where to begin.

This story is sadly not an uncommon one. While many business owners work very hard, they may not be running their business in the most effective manner if they don’t have a good understanding of the financial health of their business.

Financial record keeping – or accounting – is the systematic recording, reporting and analysis of financial transactions of a business. Keeping such records allows the business to analyse important indicators such as net profits and cash balances to make projections for the future.

Importantly, record keeping is also a legal requirement in many contexts. For example, the Companies Act and the Income Tax Act makes it the responsibility of the directors of the business to keep accurate records. In addition to this, certain types of companies need to be reviewed by an accounting officer or audited by a registered auditor.

Becoming financially sound

Here are some tips to ensure that your business is on the financial straight and narrow:

  • Open a separate bank account: Each business should have its own bank account in the name of the business. While it may seem simpler to use a personal current account to do business transactions, personal debit orders and ad hoc withdrawals may make it more complicated to keep track of the current ‘business’ balance. There is also the risk of spending more than the business is generating which means that an entrepreneur will not have any reserves to plough back into their business, ultimately limiting the growth and potentially leading to the demise of the business.
  • Pay yourself a salary: In order to successfully separate your personal finances from the finances of the business, you need to view yourself as an employee of your business and pay yourself a salary. If you have a monthly income from your business, then the temptation to dip into the business funds to cover personal expenses will be reduced.
  • Draw up a budget and stick to it: Realistic budgets should be set and compared to actual results on a regular basis to provide accurate information with regard to cash flows.
  • Keep detailed records of all income and expenditure: A business may have a high turnover, but that does not necessarily equate to high profits. Keeping receipts, and recording amounts spent and amounts brought in, will give you the entrepreneur a true reflection of how your business is progressing. Without all the information, it is harder for you to exercise discipline and change your spending habits.
  • Keep it simple: Management should produce records in their simplest form that will it make it easier, not only for them, but also for external stakeholders to understand. Regular appointments must be made with the external accounting officers to check the accuracy and the relevance of the record keeping.    
  • Be accountable: Ultimately the success or failure of a business depends on you the entrepreneur. On our programmes, we have observed the difference it makes to have a mentor to hold entrepreneurs like you accountable for making sure things are done the right way in your business. Entrepreneurs starting out would do well to find a mentor, who amongst other things could hold them accountable for managing their expenditure.

As complicated as it might seem initially to get your structures and processes in place and ensure you have a basic understanding of record keeping, it is an area that simply cannot be ignored. Without this pillar, your cash flow will be under strain and the sustainability of your business could be under serious threat. Don’t delay, start today and obtain peace of mind from being more in control financially of your small business.

Tursuis Ruiters is a Financial Mentor at The Hope Factory and a BCom Rationum Law graduate from NMMU. The Hope Factory is an established Enterprise Development organisation associated with the South African Institute of Chartered Accountants (SAICA). It mentors and train potential black entrepreneurs to develop life and business skills in order to create new businesses and equips black entrepreneurs with skills to grow their existing businesses.


Cash Flow

How South Africa’s Small Businesses Plan To Invest Their Money In 2018

Here are their five areas they should focus their attention on in the next year and beyond.




Despite economic uncertainty, South Africa’s small businesses are positive about the future. In fact, our State of South African Small Business report reveals that 40% of small businesses are expecting to grow. However, to achieve growth without overextending their limited resources, small businesses need to invest wisely.

Here are their five areas they should focus their attention on in the next year and beyond.


When times are tight, companies typically reduce their marketing spend. This isn’t the case for 36% of South Africa’s small businesses. These respondents recognise marketing as a critical investment area.

They’d rather make a concerted effort to grow their customer base, than sit still and do nothing as consumer demand declines.

Related: What To Consider When Investing Your (Hard-Earned) Money


Without access to the latest technology, business growth can quickly stagnate. This is why 23% of South Africa’s small businesses plan to invest in up to date equipment, whether that be new machinery, mobile devices or computers.

The right investment in this area can give a business a real competitive advantage.

It can help boost profits and improve operational efficiency – both of which can help a small business withstand difficult economic conditions with greater success.

Product development

Consumers are spoiled for choice. Their needs are constantly changing and companies can’t afford to become complacent. To keep up with market demands, 22% of small businesses plan to invest in product development. Barring a few timeless classics, most products need a regular review and tweak to stay relevant and popular.



Digitisation is transforming business functions across the board. Technologies, like cloud software can take care of laborious administrative work.

Related: How To Make Money Investing, According To Ashton Kutcher

This liberates employees from time-consuming tasks, enabling them to focus on more strategic work like customer retention and acquisition.

Technology has the power to improve productivity and efficiency. Which is why 18% of small businesses are going to focus their investment plans on this area of their businesses.

Customer service

The customer should always be the priority. It doesn’t matter how good a product is, if there are no customers, then there’s no business. As competition increases, the user experience becomes more and more important to win over customers.

Business growth depends on happy customers and to achieve that, 18% of small businesses plan to invest in delivering better service.

All five of the above business areas are worthy investment focuses. The question is, how does a small business work out what to invest where? The only way it can invest effectively is with a full view of its company finances. A small business needs to be able to see which functions have provided the best return on investment to date.

Related: 12 Millionaire Habits To Start Making Serious Money Soon And Build Wealth In A Hurry

It also needs to consider how much investment capital it has to spend. What’s more, before it makes an investment in say, marketing or product development, it must know exactly how and where the money needs to go.

The right software can help a small business access the real-time insights it needs to make better, faster financial decisions. To combat increased competition and market uncertainty, South Africa’s small business owners need access to up-to-the minute information from any device no matter where they are. An informed investment has the greatest chance of success.

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Cash Flow

The Simple Way To Pay Wages When Your Staff Don’t Have Bank Accounts

If you have employed casual workers over the busy season, you can pay wages even if they do not have bank accounts.






At Absa Business Banking, the things that are important to you are just as important to us. We understand your business needs, which is why we have developed tailored solutions to help you where it counts. Take CashSend Plus, for example. It is a payment solution that enables you to pay workers even if they do not have bank accounts.

Related: Hiring Your First Employee? 5 Things You Need To Know

It is safe and secure

Your employee will receive a six-digit access code and a ten-digit reference number, so that they can verify the transaction. The money is instantly available at an Absa ATM.

You can even pay yourself

We have all lost bank cards or wallets at some point in our lives. What an inconvenience. Well, it is good to know then that you can access cash by sending it to yourself. Now, that is what we call better. 

Related: How Salary Transparency Empowers Employees – And When Not To Use It


Please speak to one of our consultants or call 0860 111 123 or visit your nearest branch.

Absa Business Banking 

Do better business. Prosper.

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Cash Flow

Strategies To Help You Stay Out Of The Red With Cash Flow

Cash flow management is always essential, but in a recessionary environment it’s even more crucial to the overall health of an organisation. Here’s how you can keep your business growing and out of the red.

Pieter Scholtz




In every adversity there is an upside. This saying is particularly valid when it comes to managing your cashflow in a recession. As we all know, cashflow is the lifeblood of any business. Banks are implementing stricter lending criteria and this places greater strain on your business as the availability of cash becomes limited.

For savvy entrepreneurs there are a number of strategies that one can apply to ensure that you have the required cash to continue funding your business operations.

Conduct a rigorous overview of your costs

This is a particularly good time to review all your costs in your business and truly question each expense. Often this exercise reveals unnecessary costs that do not impact the effective operation of the business. Set yourself and your team a target to be able to reduce costs by 10% and then review these costs with each department.

A really good example to follow are costs that once trimmed have a ripple effect of cost reduction in other areas of the business. Scaling down on office rental has the advantage of reducing your utility bill, insurance and possibly also your telecommunications bill.

Related: Cash Flow Tips For Small Businesses To Survive Rocky Times

Managing your Debtors Book

If you are not already doing it, you should be reviewing your debtors book at least weekly, dependent upon the type of business you are running. Keep regular contact with all your customers, particularly those outside of their credit terms.

Chase payments from these customers regularly but fairly and ensure that you apply your own debtors policy and procedure.

If you find this difficult to do, appoint a third party to manage your debtors book for you but do not lose touch with your customers.


Ensure that you are invoicing your customers at the completion of ‘project’ and do not delay invoicing for a particular day in the month. This ensures that your customers are required to pay you timeously for the work done, for example within seven days of invoicing.

Review your Supplier credit terms

This is an important process to go through but recognise that your suppliers will be managing their cashflow as well. If you are a regular supplier and have a good payment history, they will be more willing to discuss an extension of payment terms with you.

It’s very important that you discuss any ‘broken agreements’ with them as soon as you are aware of them. If new payment terms are agreed, ensure that you can manage them.

Related: Funding Solutions That Support Business Cash Flow

Cash Flow Cycle

This is an ideal time to review your cash flow cycle to determine the length of time it takes from receiving an order to invoicing and receiving the cash in your bank account. Identify each step in the process and determine whether there are ways to shorten the cycle.

Bank Finance

It’s always good advice to keep communication with your bank open but this is even more important in a recessionary environment. Should you require additional financing from your bank to be able to fund short-term shortfalls, ensure that you have a good business plan to support your application, as this will give the bank the comfort that you are ‘on top’ of your game, particularly where your cashflow plan is concerned. While bank finance should be your source of last resort, do not leave it until the last minute.

Following these strategies will largely negate the negative consequences that a shortfall of cash may have on your business.

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